Gildan Activewear Inc CAPEX dropped on 42.3% in 2016 and Revenue increased slightly on 0.64%
23.02.2017 • About Gildan Activewear Inc (
$GIL) • By InTwits
Gildan Activewear Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Gildan Activewear Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's in pair with industry average of 7.8%.
- CAPEX is quite volatile: 129 in FY2016, 224 in FY2015, 287 in FY2014, 163 in FY2013, 71.3 in FY2012
- The company has highly profitable business model: ROIC is at 14.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Gildan Activewear Inc ($GIL) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,948 | 2,184 | 2,360 | 2,569 | 2,585 | 0.6% |
| Gross Profit | 396 | 634 | 659 | 687 | 720 | 4.7% |
| SG&A | 226 | 283 | 286 | 308 | 336 | 9.1% |
| EBITDA | 250 | 438 | 465 | 492 | 512 | 4.0% |
| Net Income | 148 | 320 | 360 | 346 | 347 | 0.1% |
Balance Sheet
|
|---|
| Cash | 70 | 97 | 65 | 51 | 38 | -24.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 181 | 0 | 157 | 375 | 600 | 60.0% |
Cash flow
|
|---|
| Capex | 71 | 163 | 287 | 224 | 129 | -42.3% |
Ratios
|
|---|
| Revenue growth | 12.9% | 12.1% | 8.0% | 8.8% | 0.6% | |
| EBITDA growth | -15.3% | 75.4% | 6.2% | 5.9% | 4.0% | |
| Gross Margin | 20.3% | 29.0% | 27.9% | 26.8% | 27.8% | 1.1% |
| EBITDA Margin | 12.8% | 20.1% | 19.7% | 19.2% | 19.8% | 0.6% |
| Net Income Margin | 7.6% | 14.7% | 15.2% | 13.5% | 13.4% | -0.1% |
| SG&A, % of revenue | 11.6% | 12.9% | 12.1% | 12.0% | 13.0% | 1.0% |
| CAPEX, % of revenue | 3.7% | 7.4% | 12.1% | 8.7% | 5.0% | -3.7% |
| ROIC | 9.9% | 20.6% | 18.9% | 15.5% | 14.0% | -1.4% |
| ROE | 10.8% | 20.4% | 19.2% | 16.4% | 16.1% | -0.3% |
| Net Debt/EBITDA | 0.4x | -0.2x | 0.2x | 0.7x | 1.1x | 0.4x |
Gildan Activewear Inc ($GIL) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 593 | 689 | 715 | 588 | -6.7% | -3.5% | 6.0% | 8.1% |
| EBITDA | 105 | 142 | 162 | 102 | 15.7% | 0.5% | 1.7% | 2.0% |
| Net Income | 63 | 95 | 114 | 74 | 12.9% | -4.7% | -7.0% | 9.9% |
Balance Sheet
|
|---|
| Cash | 53 | 55 | 60 | 38 | -11.3% | 22.4% | 28.3% | -24.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 584 | 738 | 691 | 600 | -5.5% | 24.5% | 49.6% | 60.0% |
Ratios
|
|---|
| Gross Margin | 26.4% | 27.4% | 30.4% | 26.7% | 4.4% | 0.8% | -1.0% | 0.1% |
| EBITDA Margin | 17.7% | 20.7% | 22.7% | 17.4% | 3.4% | 0.8% | -1.0% | -1.0% |
| Net Income Margin | 10.7% | 13.7% | 16.0% | 12.6% | 1.9% | -0.2% | -2.2% | 0.2% |
Revenue and profitability
The company's Revenue increased slightly on 0.64%. Revenue growth showed acceleration in FY16Q4 - it increased 8.1% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.6 pp from -1.6% to 6.0% in 2016.
Gross Margin increased slightly on 1.1 pp from 26.8% to 27.8% in FY2016. SG&A as a % of Revenue increased slightly on 1.0 pp from 12.0% to 13.0% in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Gildan Activewear Inc had CAPEX/Revenue of 5.0%. Gildan Activewear Inc showed decline in CAPEX/Revenue of 2.4 pp from 7.4% in FY2013 to 5.0% in FY2016. It's average level of CAPEX/Revenue for the last three years was 8.6%.
Return on investment
The company operates at good ROIC (14.04%) and ROE (16.09%). ROIC decreased slightly on 1.4 pp from 15.5% to 14.0% in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Debt level is 1.1x Net Debt / EBITDA and 1.2x Debt / EBITDA. Net Debt / EBITDA surged on 0.4x from 0.7x to 1.1x in FY2016. Debt jumped on 60% while cash dropped on 24.6%.
Management team
The company's CEO Glenn J Chamandy is a founder and has spent 14 years at the company. Gildan Activewear Inc's CFO is Rhodri J Harries. Rhodri J Harries has 3 years tenure at the company.
Appendix 1: Peers in Consumer, Cyclical
Below you can find Gildan Activewear Inc 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 ($CWX) | | 2.1% | 4.6% | 8.6% | 18.6% |
| |
|---|
| Median (35 companies) | | 4.7% | 6.6% | 6.1% | 5.5% |
|---|
| Gildan Activewear Inc ($GIL) | | 12.1% | 8.0% | 8.8% | 0.6% |
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 ($ICE) | 71.6% | 69.7% | 70.7% | 78.2% | |
| |
|---|
| Median (36 companies) | 38.1% | 34.2% | 33.5% | 32.6% | 36.2% |
|---|
| Gildan Activewear Inc ($GIL) | 20.3% | 29.0% | 27.9% | 26.8% | 27.8% |
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 ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (38 companies) | 8.0% | 9.8% | 12.2% | 10.0% | 15.0% |
|---|
| Gildan Activewear Inc ($GIL) | 12.8% | 20.1% | 19.7% | 19.2% | 19.8% |
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 ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | 29.7% |
| |
|---|
| Median (41 companies) | 2.7% | 2.9% | 3.3% | 3.2% | 4.9% |
|---|
| Gildan Activewear Inc ($GIL) | 3.7% | 7.4% | 12.1% | 8.7% | 5.0% |
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 ($AC) | | 37.0% | 23.2% | 28.4% | 18.8% |
| |
|---|
| Median (41 companies) | 11.0% | 12.4% | 10.8% | 10.2% | 11.0% |
|---|
| Gildan Activewear Inc ($GIL) | 9.9% | 20.6% | 18.9% | 15.5% | 14.0% |
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 ($PSG) | 2.6x | 3.5x | 12.2x | 6.5x | |
| |
|---|
| Median (34 companies) | 2.1x | 2.8x | 2.4x | 2.6x | 2.1x |
|---|
| Gildan Activewear Inc ($GIL) | 0.4x | -0.2x | 0.2x | 0.7x | 1.1x |
