Loblaw Cos Ltd EBITDA jumped on 13.8% in 2016 and Revenue increased on 2.2%
23.02.2017 • About Loblaw Cos Ltd (
$L) • By InTwits
Loblaw Cos Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Loblaw Cos Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 5,768,000 in FY2016, 8,548,933 in FY2015, 8,923,568 in FY2014, 14,227,777 in FY2013, 15,467,862 in FY2012
- The company has business model with low profitability: ROIC is at 7.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Loblaw Cos Ltd ($L) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 31,604 | 32,371 | 42,611 | 45,394 | 46,385 | 2.2% |
| Gross Profit | 7,419 | 7,675 | 10,548 | 12,548 | 13,172 | 5.0% |
| SG&A | 6,224 | 6,349 | 9,886 | 10,947 | 11,080 | 1.2% |
| EBITDA | 1,972 | 2,150 | 2,134 | 3,193 | 3,635 | 13.8% |
| Net Income | 634 | 630 | 53 | 598 | 983 | 64.4% |
Balance Sheet
|
|---|
| Cash | 1,079 | 2,260 | 999 | 1,018 | 1,314 | 29.1% |
| Short Term Debt | 1,577 | 1,613 | 1,187 | 1,691 | 1,180 | -30.2% |
| Long Term Debt | 4,997 | 6,672 | 11,042 | 10,013 | 10,470 | 4.6% |
Cash flow
|
|---|
| Capex | 1,017 | 865 | 856 | 1,008 | 896 | -11.1% |
Ratios
|
|---|
| Revenue growth | 1.1% | 2.4% | 31.6% | 6.5% | 2.2% | |
| EBITDA growth | -5.3% | 9.0% | -0.7% | 49.6% | 13.8% | |
| Gross Margin | 23.5% | 23.7% | 24.8% | 27.6% | 28.4% | 0.8% |
| EBITDA Margin | 6.2% | 6.6% | 5.0% | 7.0% | 7.8% | 0.8% |
| Net Income Margin | 2.0% | 1.9% | 0.1% | 1.3% | 2.1% | 0.8% |
| SG&A, % of revenue | 19.7% | 19.6% | 23.2% | 24.1% | 23.9% | -0.2% |
| CAPEX, % of revenue | 3.2% | 2.7% | 2.0% | 2.2% | 1.9% | -0.3% |
| ROIC | 9.5% | 9.4% | 3.1% | 5.9% | 7.7% | 1.8% |
| ROE | 10.2% | 9.4% | 0.5% | 4.7% | 7.7% | 3.0% |
| Net Debt/EBITDA | 2.8x | 2.8x | 5.3x | 3.3x | 2.8x | -0.5x |
Loblaw Cos Ltd ($L) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 10,381 | 10,731 | 14,143 | 11,130 | 3.3% | 1.9% | 1.4% | 2.4% |
| EBITDA | 804 | 863 | 1,154 | 814 | 2.6% | 10.4% | 23.4% | 17.6% |
| Net Income | 196 | 161 | 422 | 204 | 34.2% | -13.0% | 148.2% | 55.7% |
Balance Sheet
|
|---|
| Cash | 1,243 | 1,210 | 1,312 | 1,314 | 22.7% | -5.8% | 2.9% | 29.1% |
| Short Term Debt | 1,325 | 1,047 | 1,033 | 1,180 | 6.1% | -41.5% | -52.3% | -30.2% |
| Long Term Debt | 10,395 | 10,419 | 10,413 | 10,470 | -4.8% | 3.6% | 6.7% | 4.6% |
Ratios
|
|---|
| Gross Margin | 28.8% | 28.2% | 27.9% | 28.8% | 0.6% | 0.6% | 0.9% | 0.9% |
| EBITDA Margin | 7.7% | 8.0% | 8.2% | 7.3% | -0.1% | 0.6% | 1.5% | 0.9% |
| Net Income Margin | 1.9% | 1.5% | 3.0% | 1.8% | 0.4% | -0.3% | 1.8% | 0.6% |
Revenue and profitability
Loblaw Cos Ltd's Revenue increased on 2.2%. Revenue growth showed acceleration in 16Q4 - it increased 2.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 8.2 pp from 53.0% to 44.8% in FY2016.
Gross Margin increased slightly on 0.75 pp from 27.6% to 28.4% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased slightly on 0.80 pp from 1.3% to 2.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Loblaw Cos Ltd had CAPEX/Revenue of 1.9%. CAPEX/Revenue decreased slightly on 0.74 pp from 2.7% in 2013 to 1.9% in 2016. It's average level of CAPEX/Revenue for the last three years was 2.1%.
Return on investment
The company operates at low ROIC (7.70%) and ROE (7.66%). ROIC increased slightly on 1.8 pp from 5.9% to 7.7% in 2016. ROE increased on 3.0 pp from 4.7% to 7.7% in 2016.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and 3.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 3.3x to 2.8x in 2016. Debt showed almost no change in 2016 while cash surged on 29.1%.
Management team
Loblaw Cos Ltd's CEO Galen G Weston has spent 12 years at the company. The company's CFO Richard Dufresne has spent 4 years at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below you can find Loblaw Cos Ltd 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% | 13.7% | 15.6% | 12.8% |
|---|
| Loblaw Cos Ltd ($L) | | 2.4% | 31.6% | 6.5% | 2.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cipher Pharmaceuticals Inc ($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% | 33.2% |
|---|
| Loblaw Cos Ltd ($L) | 23.5% | 23.7% | 24.8% | 27.6% | 28.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CRH Medical Corp ($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) | 9.9% | 12.8% | 14.1% | 12.7% | 10.7% |
|---|
| Loblaw Cos Ltd ($L) | 6.2% | 6.6% | 5.0% | 7.0% | 7.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| ProMetic Life Sciences Inc ($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% | 2.4% | 2.2% |
|---|
| Loblaw Cos Ltd ($L) | 3.2% | 2.7% | 2.0% | 2.2% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Information Services Corp ($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% | 8.5% | 7.5% | 8.4% |
|---|
| Loblaw Cos Ltd ($L) | 9.5% | 9.4% | 3.1% | 5.9% | 7.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Concordia Healthcare Corp ($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 | 2.2x | 3.3x | 2.3x | 2.8x |
|---|
| Loblaw Cos Ltd ($L) | 2.8x | 2.8x | 5.3x | 3.3x | 2.8x |
