Cott Corp Debt jumped on 33.3% in 2016 and Net Debt / EBITDA surged on 1.6x from 4.9x to 6.5x
23.02.2017 • About Cott Corp (
$BCB) • By InTwits
Cott Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cott Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 140 in 2016, 111 in 2015, 46.7 in 2014, 55.6 in 2013, 69.7 in 2012
- The company has potentially unprofitable business model: ROIC is at 2.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cott Corp ($BCB) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,251 | 2,094 | 2,103 | 2,944 | 3,236 | 9.9% |
| Gross Profit | 289 | 252 | 277 | 895 | 1,074 | 20.0% |
| SG&A | 178 | 157 | 252 | 766 | 956 | 24.8% |
| EBITDA | 207 | 189 | 126 | 323 | 321 | -0.7% |
| Net Income | 48 | 17 | 11 | 15 | -78 | -636.6% |
Balance Sheet
|
|---|
| Cash | 179 | 47 | 86 | 77 | 118 | 53.2% |
| Short Term Debt | 2 | 55 | 233 | 125 | 213 | 69.6% |
| Long Term Debt | 602 | 404 | 1,541 | 1,525 | 1,988 | 30.3% |
Cash flow
|
|---|
| Capex | 70 | 56 | 47 | 111 | 140 | 26.2% |
Ratios
|
|---|
| Revenue growth | -3.6% | -7.0% | 0.4% | 40.0% | 9.9% | |
| EBITDA growth | 5.8% | -8.7% | -33.3% | 155.7% | -0.7% | |
| Gross Margin | 12.9% | 12.0% | 13.1% | 30.4% | 33.2% | 2.8% |
| EBITDA Margin | 9.2% | 9.0% | 6.0% | 11.0% | 9.9% | -1.1% |
| Net Income Margin | 2.1% | 0.8% | 0.5% | 0.5% | -2.4% | -2.9% |
| SG&A, % of revenue | 7.9% | 7.5% | 12.0% | 26.0% | 29.5% | 3.5% |
| CAPEX, % of revenue | 3.1% | 2.7% | 2.2% | 3.8% | 4.3% | 0.6% |
| ROIC | 8.9% | 7.5% | 0.9% | 4.0% | 2.9% | -1.1% |
| ROE | 8.2% | 2.8% | 1.8% | -0.6% | -10.3% | -9.7% |
| Net Debt/EBITDA | 2.0x | 2.2x | 13.4x | 4.9x | 6.5x | 1.6x |
Cott Corp ($BCB) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 698 | 765 | 885 | 887 | -1.6% | -1.9% | 17.1% | 27.0% |
| EBITDA | 67 | 90 | 98 | 66 | 4.8% | -13.6% | 12.8% | -3.4% |
| Net Income | -3 | 7 | -4 | -78 | | -55.4% | -181.3% | |
Balance Sheet
|
|---|
| Cash | 55 | 250 | 119 | 118 | 59.7% | 215.8% | 86.7% | 53.2% |
| Short Term Debt | 66 | 4 | 269 | 213 | -70.6% | -98.2% | 72.8% | 69.6% |
| Long Term Debt | 1,524 | 2,013 | 2,019 | 1,988 | -1.8% | 29.9% | 30.4% | 30.3% |
Ratios
|
|---|
| Gross Margin | 30.6% | 33.0% | 34.5% | 34.0% | 2.3% | 2.2% | 3.8% | 2.4% |
| EBITDA Margin | 9.6% | 11.8% | 11.0% | 7.4% | 0.6% | -1.6% | -0.4% | -2.3% |
| Net Income Margin | -0.5% | 1.0% | -0.4% | -8.8% | -0.1% | -1.2% | -1.1% | -8.2% |
Revenue and profitability
Cott Corp's Revenue increased on 9.9%. Revenue growth showed acceleration in 16Q4 - it increased 27.0% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 11.0% to 9.9% in 2016.
Gross Margin increased on 2.8 pp from 30.4% to 33.2% in 2016. SG&A as a % of Revenue increased on 3.5 pp from 26.0% to 29.5% in 2016.
Net Income marign decreased on 2.9 pp from 0.49% to -2.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
Cott Corp's CAPEX/Revenue was 4.3% in 2016. The company's CAPEX/Revenue increased slightly on 1.7 pp from 2.7% in 2013 to 4.3% in 2016. It's average CAPEX/Revenue for the last three years was 3.4%.
Return on investment
The company operates at low but positive ROIC (2.93%) and negative ROE (-10.32%). ROIC decreased slightly on 1.1 pp from 4.0% to 2.9% in 2016. ROE decreased on 9.7 pp from -0.58% to -10.3% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.5x and Debt / EBITDA is 6.9x. Net Debt / EBITDA jumped on 1.6x from 4.9x to 6.5x in 2016. Debt jumped on 33.3% while cash jumped on 53.2%.
Management team
Jerry Stephen Gary Fowden is a the company's CEO. Jerry Stephen Gary Fowden is a founder and has spent 9 years at the company. Cott Corp's CFO is Jay Wells. Jay Wells has 6 years tenure at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide Cott Corp benchmarking against other companies in Consumer, Non-cyclical 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 |
|---|
| 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 ($NRI) | | -25.3% | -29.1% | 57.0% | 31.9% |
| |
|---|
| Median (40 companies) | | 9.1% | 13.9% | 14.9% | 12.8% |
|---|
| Cott Corp ($BCB) | | -7.0% | 0.4% | 40.0% | 9.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | | 99.5% | 98.3% | 92.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 88.7% | 88.4% | 88.0% | 89.1% | 88.3% |
| 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 ($CXR) | | 79.4% | 86.0% | 76.1% | 72.9% |
| |
|---|
| Median (34 companies) | 35.4% | 39.2% | 35.8% | 36.1% | 28.9% |
|---|
| Cott Corp ($BCB) | 12.9% | 12.0% | 13.1% | 30.4% | 33.2% |
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 ($CXR) | | 43.7% | 37.0% | 39.8% | -92.8% |
| Ritchie Bros Auctioneers Inc ($RBA) | 36.8% | 36.3% | 36.4% | 39.7% | 31.4% |
| EnerCare Inc ($ECI) | 52.8% | 51.0% | 45.5% | 39.3% | 26.6% |
| |
|---|
| Median (43 companies) | 9.7% | 12.8% | 14.1% | 12.7% | 10.7% |
|---|
| Cott Corp ($BCB) | 9.2% | 9.0% | 6.0% | 11.0% | 9.9% |
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 ($KBL) | 10.0% | 19.0% | 11.4% | 16.6% | |
| |
|---|
| Median (42 companies) | 3.1% | 2.8% | 2.4% | 2.3% | 2.0% |
|---|
| Cott Corp ($BCB) | 3.1% | 2.7% | 2.2% | 3.8% | 4.3% |
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 ($PBH) | 10.3% | 9.9% | 6.9% | 12.6% | 15.3% |
| |
|---|
| Median (43 companies) | 8.6% | 9.2% | 8.5% | 7.5% | 8.4% |
|---|
| Cott Corp ($BCB) | 8.9% | 7.5% | 0.9% | 4.0% | 2.9% |
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 ($VRX) | 9.5x | 10.4x | 4.0x | 7.3x | 12.7x |
| |
|---|
| Median (37 companies) | 2.9x | 2.3x | 3.3x | 2.3x | 2.7x |
|---|
| Cott Corp ($BCB) | 2.0x | 2.2x | 13.4x | 4.9x | 6.5x |
