Cineplex Inc Net Income dropped on 40.8% in 2016 and EBITDA Margin decreased on 4.7 pp from 20.4% to 15.6%
15.02.2017 • About Cineplex Inc (
$CGX) • By InTwits
Cineplex Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cineplex Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.9%. At the same time it's in pair with industry average of 7.8%.
- CAPEX is quite volatile: 43.4 in 2016, 168 in 2015, 601 in 2014, 342 in 2013, 307 in 2012
- The company has business model with average profitability: ROIC is at 10.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cineplex Inc ($CGX) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,093 | 1,171 | 1,235 | 1,371 | 1,478 | 7.8% |
| Gross Profit | 693 | 750 | 804 | 901 | 993 | 10.1% |
| EBITDA | 224 | 194 | 194 | 279 | 231 | -17.2% |
| Net Income | 120 | 84 | 76 | 135 | 80 | -40.8% |
Balance Sheet
|
|---|
| Cash | 49 | 44 | 34 | 36 | 34 | -6.0% |
| Short Term Debt | 2 | 2 | 3 | 7 | 3 | -52.5% |
| Long Term Debt | 169 | 332 | 343 | 335 | 409 | 22.1% |
Cash flow
|
|---|
| Capex | 72 | 62 | 106 | 96 | 104 | 8.6% |
Ratios
|
|---|
| Revenue growth | 9.4% | 7.2% | 5.4% | 11.0% | 7.8% | |
| EBITDA growth | 31.3% | -13.5% | -0.2% | 44.2% | -17.2% | |
| Gross Margin | 63.4% | 64.1% | 65.1% | 65.7% | 67.1% | 1.4% |
| EBITDA Margin | 20.5% | 16.6% | 15.7% | 20.4% | 15.6% | -4.7% |
| Net Income Margin | 11.0% | 7.1% | 6.2% | 9.8% | 5.4% | -4.4% |
| CAPEX, % of revenue | 6.6% | 5.3% | 8.6% | 7.0% | 7.0% | 0.0% |
| ROIC | 18.2% | 12.7% | 10.8% | 17.1% | 10.8% | -6.3% |
| ROE | 17.6% | 11.2% | 10.3% | 18.0% | 10.5% | -7.5% |
| Net Debt/EBITDA | 0.5x | 1.5x | 1.6x | 1.1x | 1.6x | 0.5x |
Cineplex Inc ($CGX) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 379 | 338 | 376 | 385 | 30.8% | -2.2% | 14.5% | -5.4% |
| EBITDA | 56 | 42 | 67 | 66 | 44.7% | -33.5% | 17.5% | -45.0% |
| Net Income | 22 | 8 | 26 | 24 | 108.1% | -70.0% | 22.7% | -69.2% |
Balance Sheet
|
|---|
| Cash | 39 | 35 | 24 | 34 | 135.0% | 48.1% | -4.5% | -6.0% |
| Short Term Debt | 7 | 3 | 3 | 3 | 145.1% | 9.0% | 8.1% | -52.5% |
| Long Term Debt | 416 | 439 | 444 | 409 | 5.7% | 11.5% | 5.5% | 22.1% |
Ratios
|
|---|
| Gross Margin | 65.0% | 66.8% | 68.1% | 68.6% | -0.6% | 3.3% | 2.8% | 0.6% |
| EBITDA Margin | 14.9% | 12.4% | 17.7% | 17.2% | 1.4% | -5.8% | 0.4% | -12.4% |
| Net Income Margin | 5.8% | 2.3% | 7.0% | 6.2% | 2.1% | -5.1% | 0.5% | -12.8% |
Revenue and profitability
The company's Revenue increased on 7.8%. Revenue growth showed slow down in 16Q4 - it was -5.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.8 pp from 16.6% to 20.3% in 2016.
Gross Margin increased slightly on 1.4 pp from 65.7% to 67.1% in 2016.
Net Income marign decreased on 4.4 pp from 9.8% to 5.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 7.0%. The company's CAPEX/Revenue increased slightly on 1.7 pp from 5.3% in 2013 to 7.0% in 2016. For the last three years the average CAPEX/Revenue was 7.5%.
Return on investment
The company operates at low ROIC (10.81%) and ROE (10.51%). ROIC decreased on 6.3 pp from 17.1% to 10.8% in 2016. ROE decreased on 7.5 pp from 18.0% to 10.5% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.6x and Debt / EBITDA is 1.8x. Net Debt / EBITDA jumped on 0.5x from 1.1x to 1.6x in 2016. Debt jumped on 20.6% while cash decreased on 6.0%.
Management team
Cineplex Inc's CEO Ellis Jacob is a founder and has spent 15 years at the company.
Appendix 1: Peers in Consumer, Cyclical
Below you can find Cineplex Inc benchmarking vs. other companies in Consumer, Cyclical 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 |
|---|
| 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 (35 companies) | | 4.7% | 7.2% | 6.1% | 4.6% |
|---|
| Cineplex Inc ($CGX) | | 7.2% | 5.4% | 11.0% | 7.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Innova Gaming Group Inc ($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 (36 companies) | 34.1% | 30.8% | 31.9% | 30.6% | 33.5% |
|---|
| Cineplex Inc ($CGX) | 63.4% | 64.1% | 65.1% | 65.7% | 67.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($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 (38 companies) | 8.0% | 9.8% | 12.2% | 10.0% | 15.0% |
|---|
| Cineplex Inc ($CGX) | 20.5% | 16.6% | 15.7% | 20.4% | 15.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($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 (41 companies) | 2.7% | 2.9% | 3.3% | 3.2% | 4.9% |
|---|
| Cineplex Inc ($CGX) | 6.6% | 5.3% | 8.6% | 7.0% | 7.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($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 (41 companies) | 10.2% | 12.4% | 10.9% | 10.2% | 11.4% |
|---|
| Cineplex Inc ($CGX) | 18.2% | 12.7% | 10.8% | 17.1% | 10.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($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 (34 companies) | 2.1x | 2.8x | 2.4x | 2.6x | 2.1x |
|---|
| Cineplex Inc ($CGX) | 0.5x | 1.5x | 1.6x | 1.1x | 1.6x |
