Bombardier Inc reports 33.2% CAPEX decline and 10.1% Revenue decline
16.02.2017 • About Bombardier Inc (
$BBD.B) • By InTwits
Bombardier Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bombardier Inc is a company in decline: 2016 revenue growth was -10.1%, 5 years revenue CAGR was -2.3%
- Bombardier Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 was 0.0%. On average EBITDA Margin was -2.1% for the sames years0
- Bombardier Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.8%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 1,073 in 2016, 2,994 in 2015, 5,290 in 2014, 6,297 in 2013, 5,478 in 2012
- The company has unprofitable business model: ROIC is at -1.3%
- It operates with high leverage: Net Debt/EBITDA is 17.2x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Bombardier Inc ($BBD.B) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 16,414 | 18,151 | 20,111 | 18,172 | 16,339 | -10.1% |
| Gross Profit | 2,361 | 2,493 | 2,577 | 1,973 | 1,717 | -13.0% |
| SG&A | 1,442 | 1,417 | 1,358 | 1,213 | 1,133 | -6.6% |
| EBITDA | 1,030 | 1,314 | -149 | -4,400 | 313 | |
| Net Income | 460 | 564 | -1,260 | -5,347 | -1,022 | |
Balance Sheet
|
|---|
| Cash | 2,557 | 3,397 | 2,489 | 2,720 | 3,384 | 24.4% |
| Short Term Debt | 0 | 0 | 56 | 71 | 31 | -56.3% |
| Long Term Debt | 5,360 | 6,988 | 7,627 | 8,908 | 8,738 | -1.9% |
Cash flow
|
|---|
| Capex | 2,125 | 2,357 | 1,982 | 1,879 | 1,255 | -33.2% |
Ratios
|
|---|
| Revenue growth | -10.5% | 10.6% | 10.8% | -9.6% | -10.1% | |
| EBITDA growth | -32.9% | 27.6% | -111.3% | 2,853.0% | -107.1% | |
| Gross Margin | 14.4% | 13.7% | 12.8% | 10.9% | 10.5% | -0.3% |
| EBITDA Margin | 6.3% | 7.2% | -0.7% | -24.2% | 1.9% | 26.1% |
| Net Income Margin | 2.8% | 3.1% | -6.3% | -29.4% | -6.3% | 23.2% |
| SG&A, % of revenue | 8.8% | 7.8% | 6.8% | 6.7% | 6.9% | 0.3% |
| CAPEX, % of revenue | 12.9% | 13.0% | 9.9% | 10.3% | 7.7% | -2.7% |
| ROIC | 14.5% | 13.7% | -7.5% | -87.2% | -1.3% | 85.8% |
| ROE | 74.6% | 36.2% | | | | 0.0% |
| Net Debt/EBITDA | 2.7x | 2.7x | | | 17.2x | 17.2x |
Bombardier Inc ($BBD.B) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 3,914 | 4,309 | 3,736 | 4,380 | -11.0% | -6.7% | -9.7% | -12.7% |
| EBITDA | 145 | -153 | 148 | 173 | -56.8% | -149.2% | | |
| Net Income | -161 | -531 | -79 | -251 | -264.3% | -524.8% | | |
Balance Sheet
|
|---|
| Cash | 3,359 | 3,336 | 3,392 | 3,384 | -29.0% | 7.4% | 44.7% | 24.4% |
| Short Term Debt | 73 | 41 | 40 | 31 | | | | -56.3% |
| Long Term Debt | 8,978 | 8,955 | 8,923 | 8,738 | -0.8% | 0.2% | -1.2% | -1.9% |
Ratios
|
|---|
| Gross Margin | 10.9% | 10.9% | 10.3% | 10.0% | -2.0% | -1.9% | 0.2% | 2.0% |
| EBITDA Margin | 3.7% | -3.6% | 4.0% | 3.9% | -3.9% | -10.3% | 113.5% | 14.6% |
| Net Income Margin | -4.1% | -12.3% | -2.1% | -5.7% | -6.3% | -15.0% | 116.1% | 7.8% |
Revenue and profitability
Bombardier Inc's Revenue dropped on 10.1%. Revenue decline showed acceleration in 16Q4 - it was 12.7% YoY. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 26.1 pp from -24.2% to 1.9% in 2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign jumped on 23.2 pp from -29.4% to -6.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
Bombardier Inc's CAPEX/Revenue was 7.7% in 2016. The company's CAPEX/Revenue decreased on 5.3 pp from 13.0% in 2013 to 7.7% in 2016. It's average level of CAPEX/Revenue for the last three years was 9.3%.Bombardier Inc has spent a lot to CAPEX (401% of EBITDA) which didn't stop revenue from falling.
Leverage (Debt)
Company's Net Debt / EBITDA is 17.2x and Debt / EBITDA is 28.0x. Net Debt / EBITDA surged17.2x from to 17.2x in 2016. Debt decreased on 2.3% while cash surged on 24.4%.
Management team
The company's CEO Alain M Bellemare is a founder and has spent 3 years at the company. John Di Bert is a Bombardier Inc's CFO. John Di Bert has spent 3 years at the company.
Appendix 1: Peers in Industrial
Below we provide Bombardier Inc benchmarking against other companies in Industrial 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 |
|---|
| 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 ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
| |
|---|
| Median (51 companies) | | 4.9% | 9.9% | 8.5% | 3.2% |
|---|
| Bombardier Inc ($BBD.B) | | 10.6% | 10.8% | -9.6% | -10.1% |
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 ($IWG) | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% |
| |
|---|
| Median (49 companies) | 23.9% | 24.0% | 21.9% | 21.9% | 22.9% |
|---|
| Bombardier Inc ($BBD.B) | 14.4% | 13.7% | 12.8% | 10.9% | 10.5% |
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 ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| |
|---|
| Median (53 companies) | 10.5% | 8.4% | 8.6% | 9.5% | 11.1% |
|---|
| Bombardier Inc ($BBD.B) | 6.3% | 7.2% | -0.7% | -24.2% | 1.9% |
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 ($CNR) | 17.4% | 18.7% | 18.9% | 21.5% | 22.4% |
| |
|---|
| Median (54 companies) | 3.2% | 3.6% | 4.3% | 3.7% | 3.9% |
|---|
| Bombardier Inc ($BBD.B) | 12.9% | 13.0% | 9.9% | 10.3% | 7.7% |
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 ($WPK) | 20.4% | 18.0% | 18.3% | 22.6% | 21.8% |
| Toromont Industries Ltd ($TIH) | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% |
| Intertape Polymer Group Inc ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| |
|---|
| Median (55 companies) | 12.2% | 9.6% | 11.5% | 8.9% | 9.7% |
|---|
| Bombardier Inc ($BBD.B) | 14.5% | 13.7% | -7.5% | -87.2% | -1.3% |
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 (50 companies) | 1.5x | 1.5x | 1.3x | 1.0x | 1.8x |
|---|
