Canadian Tire Corp Ltd Debt jumped on 37.0% in 2016 and EBITDA increased on 2.8%
16.02.2017 • About Canadian Tire Corp Ltd (
$CTC) • By InTwits
Canadian Tire Corp Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canadian Tire Corp Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's a lot of higher than industry average of 6.8%.
- CAPEX is quite volatile: 3,797 in 2016, 4,468 in 2015, 11,398 in 2014, 7,211 in 2013, 6,104 in 2012
- The company has business model with average profitability: ROIC is at 11.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canadian Tire Corp Ltd ($CTC) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 11,427 | 11,786 | 12,463 | 12,280 | 12,681 | 3.3% |
| Gross Profit | 3,498 | 3,722 | 4,046 | 4,135 | 4,392 | 6.2% |
| SG&A | 2,344 | 2,829 | 3,053 | 3,096 | 3,292 | 6.3% |
| EBITDA | 1,138 | 1,236 | 1,376 | 1,519 | 1,562 | 2.8% |
| Net Income | 499 | 561 | 604 | 659 | 669 | 1.5% |
Balance Sheet
|
|---|
| Cash | 1,016 | 643 | 662 | 901 | 830 | -7.9% |
| Short Term Debt | 1,491 | 1,073 | 1,406 | 113 | 1,559 | 1,280.9% |
| Long Term Debt | 2,336 | 2,339 | 2,132 | 2,971 | 2,667 | -10.2% |
Cash flow
|
|---|
| Capex | 222 | 404 | 539 | 516 | 617 | 19.7% |
Ratios
|
|---|
| Revenue growth | 10.0% | 3.1% | 5.7% | -1.5% | 3.3% | |
| EBITDA growth | 7.6% | 8.6% | 11.4% | 10.3% | 2.8% | |
| Gross Margin | 30.6% | 31.6% | 32.5% | 33.7% | 34.6% | 1.0% |
| EBITDA Margin | 10.0% | 10.5% | 11.0% | 12.4% | 12.3% | -0.1% |
| Net Income Margin | 4.4% | 4.8% | 4.8% | 5.4% | 5.3% | -0.1% |
| SG&A, % of revenue | 20.5% | 24.0% | 24.5% | 25.2% | 26.0% | 0.7% |
| CAPEX, % of revenue | 1.9% | 3.4% | 4.3% | 4.2% | 4.9% | 0.7% |
| ROIC | 9.7% | 10.1% | 11.0% | 12.0% | 11.6% | -0.4% |
| ROE | 10.9% | 11.3% | 12.1% | 13.4% | 13.5% | 0.1% |
| Net Debt/EBITDA | 2.5x | 2.2x | 2.1x | 1.4x | 2.2x | 0.7x |
Canadian Tire Corp Ltd ($CTC) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,559 | 3,352 | 3,128 | 3,641 | 1.8% | 2.9% | 0.1% | 7.7% |
| EBITDA | 248 | 405 | 403 | 507 | 0.9% | 5.3% | -3.0% | 6.9% |
| Net Income | 67 | 179 | 176 | 247 | -2.9% | 8.1% | -11.7% | 9.6% |
Balance Sheet
|
|---|
| Cash | 312 | 535 | 300 | 830 | 7.2% | -50.3% | -64.5% | -7.9% |
| Short Term Debt | 1,059 | 1,069 | 376 | 1,559 | -25.3% | 1.2% | -16.4% | 1,280.9% |
| Long Term Debt | 2,966 | 3,098 | 3,094 | 2,667 | 39.2% | 4.2% | 4.1% | -10.2% |
Ratios
|
|---|
| Gross Margin | 35.7% | 33.1% | 34.3% | 35.6% | 0.6% | 0.8% | 1.5% | 0.8% |
| EBITDA Margin | 9.7% | 12.1% | 12.9% | 13.9% | -0.1% | 0.3% | -0.4% | -0.1% |
| Net Income Margin | 2.6% | 5.4% | 5.6% | 6.8% | -0.1% | 0.3% | -0.7% | 0.1% |
Revenue and profitability
Canadian Tire Corp Ltd's Revenue increased on 3.3%. Revenue growth showed acceleration in 16Q4 - it increased 7.7% YoY. EBITDA Margin showed almost no change in 2016.
Gross Margin increased slightly on 0.96 pp from 33.7% to 34.6% in 2016. SG&A as a % of Revenue increased slightly on 0.75 pp from 25.2% to 26.0% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 4.9%. Canadian Tire Corp Ltd's CAPEX/Revenue increased slightly on 1.4 pp from 3.4% in 2013 to 4.9% in 2016. It's average level of CAPEX/Revenue for the last three years was 4.5%.
Return on investment
The company operates at good ROE (13.47%) while ROIC is low (11.60%). ROIC showed almost no change in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 2.7x. Net Debt / EBITDA surged on 0.7x from 1.4x to 2.2x in 2016. Debt surged on 37.0% while cash decreased on 7.9%.
Management team
The company's CEO Stephen G Wetmore is a founder and has spent 9 years at the company. Dean Charles Mccann is a Canadian Tire Corp Ltd's CFO. Dean Charles Mccann has spent 6 years at the company.
Appendix 1: Peers in Consumer, Cyclical
Below you can find Canadian Tire Corp Ltd 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) | | 5.2% | 7.2% | 7.5% | 5.5% |
|---|
| Canadian Tire Corp Ltd ($CTC) | | 3.1% | 5.7% | -1.5% | 3.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Innova Gaming Group Inc ($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) | 38.1% | 33.5% | 32.9% | 30.6% | 35.1% |
|---|
| Canadian Tire Corp Ltd ($CTC) | 30.6% | 31.6% | 32.5% | 33.7% | 34.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($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% | 12.4% | 10.0% | 15.4% |
|---|
| Canadian Tire Corp Ltd ($CTC) | 10.0% | 10.5% | 11.0% | 12.4% | 12.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($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) | 3.2% | 2.9% | 3.3% | 3.2% | 5.0% |
|---|
| Canadian Tire Corp Ltd ($CTC) | 1.9% | 3.4% | 4.3% | 4.2% | 4.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($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) | 11.0% | 12.6% | 10.8% | 10.2% | 11.0% |
|---|
| Canadian Tire Corp Ltd ($CTC) | 9.7% | 10.1% | 11.0% | 12.0% | 11.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($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) | 1.7x | 2.8x | 2.4x | 2.6x | 1.9x |
|---|
| Canadian Tire Corp Ltd ($CTC) | 2.5x | 2.2x | 2.1x | 1.4x | 2.2x |
