Equitable Group Inc Debt jumped on 22.9% in 2016 and Revenue jumped on 13.7%
16.02.2017 • About Equitable Group Inc (
$EQB) • By InTwits
Equitable Group Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 83.0% in 2016 vs. 84.7% in 2015 vs. 88.1% in 2012
- Equitable Group Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 13.1 in 2016, 21.0 in 2015, 8.7 in 2014, 1.7 in 2013, 0.80 in 2012
- The company has potentially unprofitable business model: ROIC is at 2.2%
- It operates with high leverage: Net Debt/EBITDA is 13.7x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Equitable Group Inc ($EQB) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 481.1 | 501.0 | 518.9 | 576.1 | 655.3 | 13.7% |
| EBITDA | 424.0 | 438.0 | 446.1 | 488.0 | 544.1 | 11.5% |
| Net Income | 81.2 | 93.5 | 106.7 | 125.9 | 138.3 | 9.9% |
Balance Sheet
|
|---|
| Cash | 379.4 | 243.6 | 230.1 | 423.4 | 444.2 | 4.9% |
| Short Term Debt | 9.9 | 8.1 | 144.6 | 235.8 | 50.0 | -78.8% |
| Long Term Debt | 5,391.8 | 4,683.9 | 4,440.3 | 6,174.4 | 7,827.6 | 26.8% |
Cash flow
|
|---|
| Capex | 0.8 | 1.7 | 8.7 | 21.0 | 13.1 | -37.5% |
Ratios
|
|---|
| Revenue growth | 9.6% | 4.1% | 3.6% | 11.0% | 13.7% | |
| EBITDA growth | 7.6% | 3.3% | 1.8% | 9.4% | 11.5% | |
| EBITDA Margin | 88.1% | 87.4% | 86.0% | 84.7% | 83.0% | -1.7% |
| Net Income Margin | 16.9% | 18.7% | 20.6% | 21.8% | 21.1% | -0.7% |
| CAPEX, % of revenue | 0.2% | 0.3% | 1.7% | 3.6% | 2.0% | -1.6% |
| ROIC | | | | | 2.2% | 2.2% |
| ROE | 18.7% | 18.1% | 17.4% | 17.9% | 16.4% | -1.5% |
| Net Debt/EBITDA | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x | 1.4x |
Equitable Group Inc ($EQB) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 151 | 161 | 166 | 177 | 11.5% | 12.3% | 13.4% | 17.4% |
| EBITDA | 123 | 134 | 138 | 148 | 6.9% | 10.8% | 10.9% | 16.9% |
| Net Income | 28 | 33 | 35 | 42 | -4.9% | -0.3% | 12.0% | 32.6% |
Balance Sheet
|
|---|
| Cash | 428 | 336 | 384 | 444 | 75.6% | -46.8% | -7.2% | 4.9% |
| Short Term Debt | 0 | 170 | 399 | 50 | -100.0% | 19.9% | 110.0% | -78.8% |
| Long Term Debt | 6,641 | 6,873 | 7,324 | 7,828 | 46.2% | 38.7% | 31.5% | 26.8% |
Ratios
|
|---|
| EBITDA Margin | 81.7% | 83.5% | 83.0% | 83.9% | -3.5% | -1.1% | -1.9% | -0.4% |
| Net Income Margin | 18.5% | 20.8% | 21.2% | 23.6% | -3.2% | -2.6% | -0.3% | 2.7% |
Revenue and profitability
Equitable Group Inc's Revenue jumped on 13.7%. Revenue growth showed acceleration in 16Q4 - it increased 17.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 23.4 pp from 2.6% to -20.8% in 2016.
Net Income marign decreased slightly on 0.74 pp from 21.8% to 21.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Equitable Group Inc had CAPEX/Revenue of 2.0%. Equitable Group Inc's CAPEX/Revenue increased slightly on 1.7 pp from 0.34% in 2013 to 2.0% in 2016. It's average CAPEX/Revenue for the last three years was 2.4%.
Return on investment
The company operates at good ROE (16.41%) while ROIC is low (2.21%). ROE decreased slightly on 1.5 pp from 17.9% to 16.4% in 2016.
Leverage (Debt)
Debt level is 13.7x Net Debt / EBITDA and 14.5x Debt / EBITDA. Net Debt / EBITDA jumped on 1.4x from 12.3x to 13.7x in 2016. Debt surged on 22.9% while cash increased on 4.9%.
Appendix 1: Peers in Financial
Below you can find Equitable Group Inc benchmarking vs. other companies in Financial 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 |
|---|
| Grenville Strategic Royalty Corp ($GRC) | | | | 317.2% | |
| StorageVault Canada Inc ($SVI) | | 22.2% | 7.5% | 111.8% | |
| Slate Retail REIT ($SRT.UN) | | 316.8% | 229.7% | 92.5% | 21.6% |
| Mogo Finance Technology Inc ($GO) | | 13.7% | 34.6% | 86.0% | 14.6% |
| Morguard Corp ($MRC) | | 27.2% | 9.2% | 58.8% | 4.6% |
| |
|---|
| Median (53 companies) | | 7.5% | 9.1% | 3.0% | 5.1% |
|---|
| Equitable Group Inc ($EQB) | | 4.1% | 3.6% | 11.0% | 13.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($OLY) | 80.9% | 82.6% | 83.2% | 84.5% | 83.5% |
| Morguard Corp ($MRC) | 74.0% | 69.9% | 68.6% | 76.5% | 75.5% |
| Mogo Finance Technology Inc ($GO) | 70.4% | 64.5% | 63.4% | 62.3% | |
| StorageVault Canada Inc ($SVI) | 18.2% | 22.6% | 18.3% | 52.4% | |
| Clarke Inc ($CKI) | 28.1% | 20.0% | 18.9% | 43.4% | 41.6% |
| |
|---|
| Median (9 companies) | 28.1% | 30.7% | 28.3% | 43.4% | 30.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 87.6% | 87.9% | 88.8% | 86.6% | |
| Atrium Mortgage Investment Corp ($AI) | 79.8% | | | 81.9% | 83.2% |
| Trez Capital Mortgage Investment Corp ($TZZ) | | | | 76.2% | |
| First National Financial Corp ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| Grenville Strategic Royalty Corp ($GRC) | | | -84.1% | 72.3% | |
| |
|---|
| Median (36 companies) | 39.5% | 32.1% | 38.2% | 30.0% | 42.2% |
|---|
| Equitable Group Inc ($EQB) | 88.1% | 87.4% | 86.0% | 84.7% | 83.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dundee Corp ($DC.A) | 10.3% | 14.1% | 88.8% | 123.6% | |
| Gazit-Globe Ltd ($GZT) | 80.2% | 43.3% | 52.1% | 69.3% | 95.5% |
| First Capital Realty Inc ($FCR) | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% |
| Killam Properties Inc ($KMP) | 80.7% | 114.1% | 143.5% | 46.7% | 59.9% |
| StorageVault Canada Inc ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| |
|---|
| Median (55 companies) | 0.6% | 0.6% | 0.6% | 0.7% | 0.6% |
|---|
| Equitable Group Inc ($EQB) | 0.2% | 0.3% | 1.7% | 3.6% | 2.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CI Financial Corp ($CIX) | | | | | 24.1% |
| FirstService Corp ($FSV) | | | | | 17.4% |
| IGM Financial Inc ($IGM) | 14.2% | 14.2% | 13.7% | 13.7% | 13.1% |
| Alaris Royalty Corp ($AD) | 9.5% | 10.1% | 10.7% | 7.3% | 12.3% |
| Genworth MI Canada Inc ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (55 companies) | 4.6% | 3.8% | 3.9% | 3.0% | 3.2% |
|---|
| Equitable Group Inc ($EQB) | | | | | 2.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Element Financial Corp ($EFN) | 140.2x | 31.9x | 37.6x | 79.9x | 22.6x |
| First National Financial Corp ($FN) | 34.3x | 33.7x | 40.9x | 37.4x | |
| StorageVault Canada Inc ($SVI) | 11.2x | 9.7x | 13.6x | 35.7x | |
| Gazit-Globe Ltd ($GZT) | 12.8x | 12.7x | 15.3x | 22.1x | 15.2x |
| Temple Hotels Inc ($TPH) | 10.6x | 8.8x | 11.2x | 11.7x | 11.2x |
| |
|---|
| Median (27 companies) | 5.2x | 4.4x | 4.5x | 5.6x | 6.0x |
|---|
| Equitable Group Inc ($EQB) | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x |
