Ritchie Bros Auctioneers Inc Debt jumped on 462% in 2016 and Net Debt / EBITDA surged on 2.8x from -0.5x to 2.3x
21.02.2017 • About Ritchie Bros Auctioneers Inc (
$RBA) • By InTwits
Ritchie Bros Auctioneers Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ritchie Bros Auctioneers Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.9%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: 18.9 in 2016, 22.1 in 2015, 25.0 in 2014, 38.1 in 2013, 58.7 in 2012
- The company has highly profitable business model: ROIC is at 12.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ritchie Bros Auctioneers Inc ($RBA) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 438.0 | 467.4 | 481.1 | 515.9 | 566.4 | 9.8% |
| Gross Profit | 388.3 | 413.4 | 423.2 | 459.8 | 500.3 | 8.8% |
| SG&A | 268.2 | 287.0 | 248.2 | 255.0 | 283.5 | 11.2% |
| EBITDA | 161.2 | 169.7 | 175.0 | 204.9 | 178.0 | -13.1% |
| Net Income | 79.5 | 93.8 | 91.0 | 136.2 | 91.8 | -32.6% |
Balance Sheet
|
|---|
| Cash | 178.1 | 234.4 | 139.8 | 210.1 | 207.9 | -1.1% |
| Short Term Debt | 39.5 | 34.4 | 7.8 | 55.7 | 23.9 | -57.1% |
| Long Term Debt | 200.7 | 147.2 | 110.8 | 54.6 | 595.7 | 991.7% |
Cash flow
|
|---|
| Capex | 58.7 | 38.1 | 25.0 | 22.1 | 18.9 | -14.2% |
Ratios
|
|---|
| Revenue growth | 10.6% | 6.7% | 2.9% | 7.2% | 9.8% | |
| EBITDA growth | 10.3% | 5.3% | 3.1% | 17.1% | -13.1% | |
| Gross Margin | 88.7% | 88.4% | 88.0% | 89.1% | 88.3% | -0.8% |
| EBITDA Margin | 36.8% | 36.3% | 36.4% | 39.7% | 31.4% | -8.3% |
| Net Income Margin | 18.2% | 20.1% | 18.9% | 26.4% | 16.2% | -10.2% |
| SG&A, % of revenue | 61.2% | 61.4% | 51.6% | 49.4% | 50.1% | 0.6% |
| CAPEX, % of revenue | 13.4% | 8.1% | 5.2% | 4.3% | 3.3% | -0.9% |
| ROIC | 14.1% | 13.9% | 14.8% | 18.8% | 12.4% | -6.4% |
| ROE | 12.5% | 13.9% | 13.1% | 19.5% | 13.2% | -6.4% |
| Net Debt/EBITDA | 0.4x | -0.3x | -0.1x | -0.5x | 2.3x | 2.8x |
Ritchie Bros Auctioneers Inc ($RBA) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 132 | 159 | 129 | 147 | 14.1% | 2.1% | 17.9% | 8.3% |
| EBITDA | 49 | 65 | 13 | 52 | 12.9% | -12.6% | -67.6% | -0.2% |
| Net Income | 29 | 40 | -5 | 28 | 23.7% | -11.9% | -124.7% | -40.1% |
Balance Sheet
|
|---|
| Cash | 294 | 167 | 231 | 208 | -2.3% | -54.4% | -33.2% | -1.1% |
| Short Term Debt | 89 | 22 | 39 | 24 | 1,069.5% | -63.7% | -28.8% | -57.1% |
| Long Term Debt | 56 | 103 | 102 | 596 | -46.1% | 79.6% | 82.9% | 991.7% |
Ratios
|
|---|
| Gross Margin | 88.4% | 87.6% | 88.6% | 88.9% | -1.6% | -1.5% | -0.4% | 0.3% |
| EBITDA Margin | 37.3% | 40.7% | 9.9% | 35.4% | -0.4% | -6.9% | -26.1% | -3.0% |
| Net Income Margin | 22.3% | 25.0% | -4.0% | 19.0% | 1.7% | -4.0% | -23.0% | -15.4% |
Revenue and profitability
Ritchie Bros Auctioneers Inc's Revenue increased on 9.8%. Revenue growth showed slow down in 16Q4 - it was 8.3% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 8.3 pp from 39.7% to 31.4% in 2016.
Gross Margin decreased slightly on 0.80 pp from 89.1% to 88.3% in 2016. SG&A as a % of Revenue increased slightly on 0.63 pp from 49.4% to 50.1% in 2016.
Net Income marign dropped on 10.2 pp from 26.4% to 16.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
Ritchie Bros Auctioneers Inc's CAPEX/Revenue was 3.3% in 2016. CAPEX/Revenue decreased on 4.8 pp from 8.1% in 2013 to 3.3% in 2016. For the last three years the average CAPEX/Revenue was 4.3%.
Return on investment
The company operates at good ROIC (12.41%) and ROE (13.17%). ROIC decreased on 6.4 pp from 18.8% to 12.4% in 2016. ROE decreased on 6.4 pp from 19.5% to 13.2% in 2016.
Leverage (Debt)
Debt level is 2.3x Net Debt / EBITDA and 3.5x Debt / EBITDA. Net Debt / EBITDA surged on 2.8x from -0.5x to 2.3x in 2016. Debt surged on 462% while cash decreased slightly on 1.1%.
Management team
The company's CEO Ravichandra K Saligram "Ravi" is a founder and has spent 4 years at the company. Ritchie Bros Auctioneers Inc's CFO is Sharon Driscoll. Sharon Driscoll has 3 years tenure at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below you can find Ritchie Bros Auctioneers Inc benchmarking vs. other companies in Consumer, Non-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 |
|---|
| Concordia Healthcare Corp ($CXR) | | | 159.5% | 275.7% | 107.0% |
| Heritage Global Inc ($HGP) | | -37.0% | 76.2% | 11.2% | 80.8% |
| EnerCare Inc ($ECI) | | 8.6% | 21.1% | 55.7% | 76.6% |
| CRH Medical Corp ($CRH) | | 12.5% | 56.0% | 284.2% | 70.2% |
| Nuvo Research Inc ($NRI) | | -25.3% | -29.1% | 57.0% | 31.9% |
| |
|---|
| Median (40 companies) | | 9.1% | 13.9% | 15.6% | 12.8% |
|---|
| Ritchie Bros Auctioneers Inc ($RBA) | | 6.7% | 2.9% | 7.2% | 9.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | | 99.5% | 98.3% | 92.7% | |
| Information Services Corp ($ISV) | 77.5% | 80.4% | 80.9% | 87.6% | 85.1% |
| Biosyent Inc ($RX) | 79.3% | 79.2% | 78.1% | 78.7% | |
| Concordia Healthcare Corp ($CXR) | | 79.4% | 86.0% | 76.1% | 72.9% |
| Valeant Pharmaceuticals International Inc ($VRX) | 72.1% | 67.0% | 72.8% | 75.3% | 73.0% |
| |
|---|
| Median (34 companies) | 29.5% | 35.0% | 35.6% | 33.4% | 28.9% |
|---|
| Ritchie Bros Auctioneers Inc ($RBA) | 88.7% | 88.4% | 88.0% | 89.1% | 88.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CRH Medical Corp ($CRH) | 21.0% | 24.5% | 29.1% | 44.1% | |
| Valeant Pharmaceuticals International Inc ($VRX) | 30.6% | 27.8% | 45.6% | 39.8% | 23.8% |
| Concordia Healthcare Corp ($CXR) | | 43.7% | 37.0% | 39.8% | -92.8% |
| EnerCare Inc ($ECI) | 52.8% | 51.0% | 45.5% | 39.3% | 26.6% |
| Information Services Corp ($ISV) | 39.6% | 39.6% | 37.6% | 36.1% | 32.7% |
| |
|---|
| Median (43 companies) | 9.1% | 12.0% | 12.7% | 11.0% | 10.0% |
|---|
| Ritchie Bros Auctioneers Inc ($RBA) | 36.8% | 36.3% | 36.4% | 39.7% | 31.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| ProMetic Life Sciences Inc ($PLI) | 2.1% | 33.6% | 34.6% | 23.3% | |
| EnerCare Inc ($ECI) | 25.7% | 26.5% | 23.6% | 20.7% | 15.5% |
| Black Diamond Group Ltd ($BDI) | 61.9% | 27.5% | 31.0% | 17.6% | |
| easyhome Ltd ($EH) | 32.2% | 25.6% | 21.6% | 16.9% | 12.7% |
| K-Bro Linen Inc ($KBL) | 10.0% | 19.0% | 11.4% | 16.6% | |
| |
|---|
| Median (42 companies) | 3.1% | 2.7% | 2.3% | 2.3% | 2.0% |
|---|
| Ritchie Bros Auctioneers Inc ($RBA) | 13.4% | 8.1% | 5.2% | 4.3% | 3.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Information Services Corp ($ISV) | 71.8% | 72.8% | 58.9% | 38.1% | 27.6% |
| Colliers International Group Inc ($CIG) | 10.5% | 11.2% | 15.2% | 10.9% | 26.1% |
| Nuvo Research Inc ($NRI) | -11.6% | -17.4% | -37.9% | 12.9% | 20.8% |
| International Road Dynamics Inc ($IRD) | 0.9% | 6.7% | 4.4% | 10.6% | 16.5% |
| Premium Brands Holdings Corp ($PBH) | 10.3% | 9.9% | 6.9% | 12.6% | 15.3% |
| |
|---|
| Median (43 companies) | 8.6% | 7.5% | 8.4% | 6.3% | 8.0% |
|---|
| Ritchie Bros Auctioneers Inc ($RBA) | 14.1% | 13.9% | 14.8% | 18.8% | 12.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Concordia Healthcare Corp ($CXR) | | -1.3x | 5.6x | 20.2x | |
| SunOpta Inc ($SOY) | 2.9x | 3.5x | 1.3x | 16.9x | 140.8x |
| Centric Health Corp ($CHH) | 5.6x | 10.2x | 11.2x | 15.6x | |
| Sienna Senior Living Inc ($SIA) | 9.5x | 11.8x | 9.2x | 9.1x | 9.1x |
| Valeant Pharmaceuticals International Inc ($VRX) | 9.5x | 10.4x | 4.0x | 7.3x | 12.7x |
| |
|---|
| Median (37 companies) | 2.9x | 2.3x | 3.5x | 2.8x | 2.9x |
|---|
| Ritchie Bros Auctioneers Inc ($RBA) | 0.4x | -0.3x | -0.1x | -0.5x | 2.3x |
