Constellation Software Inc/Canada EBITDA jumped on 19.4% in 2016 and Revenue surged on 15.6%
15.02.2017 • About Constellation Software Inc/Canada (
$CSU) • By InTwits
Constellation Software Inc/Canada reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Constellation Software Inc/Canada is a fast growth stock: 2016 revenue growth was 15.6%, 5 year revenue CAGR was 22.4% at 2016 ROIC 40.5%
- Constellation Software Inc/Canada has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has highly profitable business model: ROIC is at 40.5%
- It operates with high leverage: Net Debt/EBITDA is -0.0x while industry average is -4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Constellation Software Inc/Canada ($CSU) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 891 | 1,211 | 1,669 | 1,838 | 2,125 | 15.6% |
| Gross Profit | 768 | 1,035 | 1,438 | 1,584 | 1,850 | 16.8% |
| SG&A | | | | | 313 | |
| EBITDA | 186 | 244 | 365 | 463 | 552 | 19.4% |
| Net Income | 93 | 93 | 103 | 177 | 207 | 16.7% |
Balance Sheet
|
|---|
| Cash | 41 | 78 | 71 | 178 | 353 | 98.1% |
| Short Term Debt | 44 | 477 | 66 | 9 | 7 | -15.6% |
| Long Term Debt | 0 | 0 | 228 | 346 | 339 | -2.1% |
Cash flow
|
|---|
| Capex | 6 | 11 | 14 | 13 | 19 | 48.1% |
Ratios
|
|---|
| Revenue growth | 15.2% | 35.9% | 37.9% | 10.1% | 15.6% | |
| EBITDA growth | 10.6% | 31.1% | 49.5% | 26.9% | 19.4% | |
| Gross Margin | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% | 0.9% |
| EBITDA Margin | 20.9% | 20.1% | 21.8% | 25.2% | 26.0% | 0.8% |
| Net Income Margin | 10.4% | 7.7% | 6.2% | 9.6% | 9.7% | 0.1% |
| SG&A, % of revenue | | | | | 14.7% | 14.7% |
| CAPEX, % of revenue | 0.7% | 0.9% | 0.8% | 0.7% | 0.9% | 0.2% |
| ROIC | 45.9% | 22.4% | 24.7% | 38.5% | 40.5% | 2.0% |
| ROE | 36.0% | 35.5% | 39.2% | 59.4% | 52.0% | -7.3% |
| Net Debt/EBITDA | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x | -0.4x |
Constellation Software Inc/Canada ($CSU) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 487 | 529 | 546 | 564 | 15.2% | 19.2% | 18.5% | 10.2% |
| EBITDA | 113 | 136 | 146 | 158 | 15.7% | 31.3% | 17.4% | 14.9% |
| Net Income | 19 | 55 | 67 | 66 | -43.3% | 68.4% | 47.6% | -0.5% |
Balance Sheet
|
|---|
| Cash | 271 | 243 | 304 | 353 | 105.7% | 84.1% | 105.3% | 98.1% |
| Short Term Debt | 9 | 8 | 8 | 7 | -87.0% | -94.8% | 49.6% | -15.6% |
| Long Term Debt | 366 | 359 | 356 | 339 | 77.6% | 73.6% | -1.8% | -2.1% |
Ratios
|
|---|
| Gross Margin | 87.1% | 87.0% | 86.6% | 87.5% | 0.5% | -0.2% | 0.1% | 2.9% |
| EBITDA Margin | 23.1% | 25.6% | 26.7% | 28.1% | 0.1% | 2.4% | -0.2% | 1.2% |
| Net Income Margin | 3.8% | 10.4% | 12.4% | 11.6% | -4.0% | 3.0% | 2.4% | -1.2% |
Revenue and profitability
Constellation Software Inc/Canada's Revenue surged on 15.6%. Revenue growth showed slow down in 16Q4 - it was 10.2% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.7 pp from 31.8% to 33.5% in FY2016.
Gross Margin increased slightly on 0.88 pp from 86.2% to 87.1% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.90% in 2016. The company's CAPEX/Revenue showed almost no change from 2013 to 2016. For the last three years the average CAPEX/Revenue was 0.81%.
Return on investment
The company operates at high and attractive ROIC (40.49%) and ROE (52.03%). ROIC increased on 2.0 pp from 38.5% to 40.5% in 2016. ROE decreased on 7.3 pp from 59.4% to 52.0% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.0x and Debt / EBITDA is 0.6x. Net Debt / EBITDA dropped on 0.4x from 0.4x to -0.013x in 2016. Debt decreased on 2.4% while cash jumped on 98.1%.
Appendix 1: Peers in Technology
Below you can find Constellation Software Inc/Canada benchmarking vs. other companies in Technology 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 |
|---|
| Intrinsyc Technologies Corp ($ITC) | | -21.7% | 70.8% | 24.5% | 39.2% |
| ProntoForms Corp ($PFM) | | 75.4% | 43.9% | 46.4% | 28.2% |
| Kinaxis Inc ($KXS) | | 30.3% | 15.2% | 30.3% | 27.0% |
| NexJ Systems Inc ($NXJ) | | 4.3% | -12.6% | 19.7% | 17.3% |
| Espial Group Inc ($ESP) | | -5.5% | 59.4% | 24.2% | 15.3% |
| |
|---|
| Median (11 companies) | | -1.0% | 11.5% | 12.8% | 10.0% |
|---|
| Constellation Software Inc/Canada ($CSU) | | 35.9% | 37.9% | 10.1% | 15.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| ProntoForms Corp ($PFM) | 96.1% | 98.1% | 98.0% | 79.4% | |
| Espial Group Inc ($ESP) | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% |
| Halogen Software Inc ($HGN) | 72.0% | 74.8% | 71.8% | 73.8% | 76.2% |
| Kinaxis Inc ($KXS) | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% |
| Symbility Solutions Inc ($SY) | 80.6% | 79.9% | 81.0% | 70.7% | |
| |
|---|
| Median (11 companies) | 62.8% | 46.3% | 53.5% | 53.0% | 69.1% |
|---|
| Constellation Software Inc/Canada ($CSU) | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wi-LAN Inc ($WIN) | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% |
| Kinaxis Inc ($KXS) | 18.7% | 23.0% | 19.2% | 28.0% | 17.6% |
| Intrinsyc Technologies Corp ($ITC) | -10.5% | -38.8% | 2.2% | 10.8% | |
| Mitel Networks Corp ($MNW) | 10.2% | 10.0% | 7.0% | 7.7% | |
| Espial Group Inc ($ESP) | -6.7% | -16.4% | 11.5% | 6.2% | -12.1% |
| |
|---|
| Median (13 companies) | -6.7% | 2.2% | 4.3% | -1.9% | 6.0% |
|---|
| Constellation Software Inc/Canada ($CSU) | 20.9% | 20.1% | 21.8% | 25.2% | 26.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% |
| Halogen Software Inc ($HGN) | 4.9% | 9.0% | 8.4% | 2.9% | 2.6% |
| Espial Group Inc ($ESP) | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% |
| ProntoForms Corp ($PFM) | 1.1% | 0.8% | 3.6% | 1.9% | |
| Critical Control Energy Services Corp ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| |
|---|
| Median (13 companies) | 1.2% | 1.2% | 1.2% | 1.4% | 1.3% |
|---|
| Constellation Software Inc/Canada ($CSU) | 0.7% | 0.9% | 0.8% | 0.7% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | | 61.8% | 63.6% | 44.0% | 22.6% |
| Halogen Software Inc ($HGN) | | -28.4% | -45.9% | -40.5% | 12.6% |
| Wi-LAN Inc ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
| Espial Group Inc ($ESP) | -14.3% | -27.0% | 9.3% | 1.5% | -8.2% |
| |
|---|
| Median (13 companies) | -8.9% | -20.1% | 0.2% | -7.5% | 6.5% |
|---|
| Constellation Software Inc/Canada ($CSU) | 45.9% | 22.4% | 24.7% | 38.5% | 40.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mitel Networks Corp ($MNW) | 3.7x | 3.8x | 2.6x | 6.2x | |
| Pivot Technology Solutions Inc ($PTG) | | -0.4x | 1.1x | 4.8x | |
| Wi-LAN Inc ($WIN) | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x |
| Kinaxis Inc ($KXS) | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x |
| Intrinsyc Technologies Corp ($ITC) | | | -19.5x | -4.4x | |
| |
|---|
| Median (6 companies) | 1.9x | 1.4x | -2.3x | -2.8x | -6.8x |
|---|
| Constellation Software Inc/Canada ($CSU) | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x |
