Canam Group Inc reports 80.9% EBITDA decline and 5.8 pp EBITDA Margin decline from 7.0% to 1.1%
16.02.2017 • About Canam Group Inc (
$CAM) • By InTwits
Canam Group Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canam Group Inc doesn't have a profitable business model yet: FY2016 ROIC is -1.5%
- EBITDA Margin is quite volatile: 1.1% in FY2016, 7.0% in FY2015, 6.4% in FY2014, 7.4% in FY2013, 6.3% in FY2012
- Canam Group Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 43.1 in FY2016, 30.4 in FY2015, 22.8 in FY2014, 17.4 in FY2013, 8.7 in FY2012
- The company has unprofitable business model: ROIC is at -1.5%
- It operates with high leverage: Net Debt/EBITDA is 13.9x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canam Group Inc ($CAM) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 905 | 1,028 | 1,233 | 1,607 | 1,857 | 15.6% |
| Gross Profit | 117 | 147 | 153 | 230 | 147 | -35.8% |
| SG&A | | 90 | 91 | 108 | 123 | 13.3% |
| EBITDA | 57 | 76 | 79 | 112 | 21 | -80.9% |
| Net Income | 17 | 31 | 29 | 47 | -13 | -128.4% |
Balance Sheet
|
|---|
| Cash | 7 | 5 | 8 | 7 | 14 | 92.4% |
| Short Term Debt | 10 | 13 | 85 | 43 | 25 | -41.5% |
| Long Term Debt | 239 | 189 | 176 | 164 | 284 | 73.1% |
Cash flow
|
|---|
| Capex | 9 | 17 | 23 | 30 | 43 | 41.8% |
Ratios
|
|---|
| Revenue growth | 2.8% | 13.6% | 19.9% | 30.3% | 15.6% | |
| EBITDA growth | -433.0% | 32.7% | 3.9% | 42.0% | -80.9% | |
| Gross Margin | 12.9% | 14.3% | 12.4% | 14.3% | 7.9% | -6.4% |
| EBITDA Margin | 6.3% | 7.4% | 6.4% | 7.0% | 1.1% | -5.8% |
| Net Income Margin | 1.9% | 3.0% | 2.4% | 2.9% | -0.7% | -3.6% |
| SG&A, % of revenue | | 8.7% | 7.4% | 6.7% | 6.6% | -0.1% |
| CAPEX, % of revenue | 1.0% | 1.7% | 1.8% | 1.9% | 2.3% | 0.4% |
| ROIC | 5.6% | 8.4% | 8.1% | 10.7% | -1.5% | -12.2% |
| ROE | 4.7% | 8.1% | 6.7% | 8.6% | -2.2% | -10.9% |
| Net Debt/EBITDA | 4.2x | 2.6x | 3.2x | 1.8x | 13.9x | 12.1x |
Canam Group Inc ($CAM) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 451 | 434 | 485 | 487 | 45.8% | 16.8% | 12.3% | -1.5% |
| EBITDA | 22 | -36 | 25 | 9 | 25.2% | -232.7% | -24.5% | -72.2% |
| Net Income | 8 | -28 | 9 | -2 | 89.4% | -382.8% | -39.6% | -111.3% |
Balance Sheet
|
|---|
| Cash | 11 | 11 | 9 | 14 | 115.8% | 99.5% | -5.5% | 92.4% |
| Short Term Debt | 41 | 41 | 21 | 25 | -52.0% | -52.8% | -77.3% | -41.5% |
| Long Term Debt | 166 | 223 | 255 | 284 | 7.3% | 27.0% | 26.2% | 73.1% |
Ratios
|
|---|
| Gross Margin | 12.1% | -0.8% | 12.0% | 7.9% | -1.5% | -15.9% | -2.7% | -6.0% |
| EBITDA Margin | 4.9% | -8.2% | 5.2% | 1.9% | -0.8% | -15.4% | -2.5% | -4.9% |
| Net Income Margin | 1.8% | -6.5% | 1.8% | -0.4% | 0.4% | -9.2% | -1.6% | -4.0% |
Revenue and profitability
Canam Group Inc's Revenue jumped on 15.6%. Revenue growth showed slow down in FY16Q4 - it was -1.5% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.5 pp from 12.6% to 14.0% in 2016.
Gross Margin decreased on 6.4 pp from 14.3% to 7.9% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased on 3.6 pp from 2.9% to -0.72% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.3% in FY2016. The company showed small growth in CAPEX/Revenue of 0.62 pp from 1.7% in FY2013 to 2.3% in FY2016. It's average level of CAPEX/Revenue for the last three years was 2.0%.To secure this fast growth Canam Group Inc made large investments to CAPEX (202% of EBITDA).
Return on investment
The company operates at negative ROIC (-1.49%) and ROE (-2.24%). ROIC dropped on 12.2 pp from 10.7% to -1.5% in FY2016. ROE dropped on 10.9 pp from 8.6% to -2.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 13.9x and Debt / EBITDA is 14.5x. Net Debt / EBITDA surged on 12.1x from 1.8x to 13.9x in FY2016. Debt jumped on 49.3% while cash surged on 92.4%.
Appendix 1: Peers in Basic Materials
Below you can find Canam Group Inc benchmarking vs. other companies in Basic Materials 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 |
|---|
| Avino Silver & Gold Mines Ltd ($ASM) | | 613.6% | 19.9% | -1.1% | 109.1% |
| Trevali Mining Corp ($TV) | | | | 12.9% | 86.4% |
| Geodrill Ltd ($GEO) | | -43.3% | -4.3% | 34.6% | 53.1% |
| Tahoe Resources Inc ($THO) | | | | 48.4% | 50.9% |
| Osisko Gold Royalties Ltd ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -3.8% | 1.8% | -2.9% | 5.7% |
|---|
| Canam Group Inc ($CAM) | | 13.6% | 19.9% | 30.3% | 15.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($NSU) | 89.9% | 94.8% | 95.5% | 82.3% | 79.7% |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.3% | 80.3% |
| Lucara Diamond Corp ($LUC) | 42.5% | 57.4% | 66.7% | 60.9% | 65.6% |
| Trevali Mining Corp ($TV) | | | 49.0% | 59.3% | |
| Perseus Mining Ltd ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.2% | 22.7% | 19.1% | 16.9% | 24.8% |
|---|
| Canam Group Inc ($CAM) | 12.9% | 14.3% | 12.4% | 14.3% | 7.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($LIF) | | | | 72.8% | 73.5% |
| Silver Wheaton Corp ($SLW) | 82.6% | 75.3% | 69.6% | 65.8% | 59.7% |
| Franco-Nevada Corp ($FNV) | 62.1% | 44.6% | 72.3% | 60.8% | 70.3% |
| Lucara Diamond Corp ($LUC) | 7.6% | 57.3% | 57.5% | 60.0% | 62.4% |
| Sandstorm Gold Ltd ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 18.6% | 11.5% | 10.7% | 7.0% | 24.5% |
|---|
| Canam Group Inc ($CAM) | 6.3% | 7.4% | 6.4% | 7.0% | 1.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($LGO) | | | | 567.6% | |
| Sandstorm Gold Ltd ($SSL) | 152.1% | 118.8% | 49.4% | 412.7% | 17.3% |
| Silver Wheaton Corp ($SLW) | 75.5% | 286.8% | 22.5% | 279.2% | 90.3% |
| Franco-Nevada Corp ($FNV) | 3.7% | 35.5% | 201.6% | 230.0% | 122.4% |
| Avino Silver & Gold Mines Ltd ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 28.1% | 27.4% | 17.8% | 17.2% | 18.3% |
|---|
| Canam Group Inc ($CAM) | 1.0% | 1.7% | 1.8% | 1.9% | 2.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($LUC) | -2.9% | 41.3% | 54.7% | 39.6% | 58.5% |
| Western Forest Products Inc ($WEF) | 9.0% | 25.1% | 15.7% | 16.4% | 25.1% |
| Geodrill Ltd ($GEO) | 8.6% | -3.5% | -9.3% | 3.6% | 20.3% |
| Supremex Inc ($SXP) | 14.1% | 18.5% | 16.5% | 23.4% | 19.3% |
| Canfor Pulp Products Inc ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.8% |
|---|
| Canam Group Inc ($CAM) | 5.6% | 8.4% | 8.1% | 10.7% | -1.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Taseko Mines Ltd ($TKO) | 7.4x | 5.9x | 10.2x | 5.9x | 11.0x |
| Methanex Corp ($MX) | 5.2x | 0.7x | 0.9x | 3.0x | 5.2x |
| Copper Mountain Mining Corp ($CUM) | 3.9x | 5.0x | 5.4x | 30.6x | 5.1x |
| Cameco Corp ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| Resolute Forest Products Inc ($RFP) | 1.3x | 1.1x | 3.8x | 29.6x | 4.0x |
| |
|---|
| Median (57 companies) | 0.3x | 0.7x | 1.1x | 1.5x | 0.6x |
|---|
| Canam Group Inc ($CAM) | 4.2x | 2.6x | 3.2x | 1.8x | 13.9x |
