Stantec Inc Debt surged on 179% in 2016 and Revenue jumped on 30.5%
23.02.2017 • About Stantec Inc (
$STN) • By InTwits
Stantec Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Stantec Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 7.8%.
- CAPEX is quite volatile: 567 in 2016, 706 in 2015, 787 in 2014, 340 in 2013, 166 in 2012
- The company has business model with low profitability: ROIC is at 9.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.4x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Stantec Inc ($STN) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,554 | 1,832 | 2,075 | 2,374 | 3,098 | 30.5% |
| Gross Profit | 854 | 1,002 | 1,138 | 1,293 | 1,676 | 29.7% |
| SG&A | 632 | 746 | 846 | 989 | 1,335 | 35.1% |
| EBITDA | 222 | 256 | 292 | 304 | 341 | 12.2% |
| Net Income | 121 | 146 | 164 | 156 | 131 | -16.5% |
Balance Sheet
|
|---|
| Cash | 41 | 143 | 154 | 67 | 211 | 213.2% |
| Short Term Debt | 43 | 37 | 53 | 133 | 92 | -30.9% |
| Long Term Debt | 256 | 201 | 256 | 232 | 929 | 299.7% |
Cash flow
|
|---|
| Capex | 23 | 53 | 43 | 38 | 58 | 53.0% |
Ratios
|
|---|
| Revenue growth | 12.7% | 17.9% | 13.3% | 14.4% | 30.5% | |
| EBITDA growth | 105.2% | 15.4% | 14.0% | 4.0% | 12.2% | |
| Gross Margin | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% | -0.4% |
| EBITDA Margin | 14.3% | 14.0% | 14.1% | 12.8% | 11.0% | -1.8% |
| Net Income Margin | 7.8% | 8.0% | 7.9% | 6.6% | 4.2% | -2.4% |
| SG&A, % of revenue | 40.7% | 40.7% | 40.8% | 41.6% | 43.1% | 1.4% |
| CAPEX, % of revenue | 1.5% | 2.9% | 2.1% | 1.6% | 1.9% | 0.3% |
| ROIC | 17.5% | 18.5% | 17.9% | 14.2% | 9.0% | -5.1% |
| ROE | 17.9% | 18.1% | 16.6% | 13.0% | 7.9% | -5.1% |
| Net Debt/EBITDA | 1.2x | 0.4x | 0.5x | 1.0x | 2.4x | 1.4x |
Stantec Inc ($STN) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 629 | 777 | 872 | 820 | 6.1% | 30.9% | 40.7% | 44.5% |
| EBITDA | 67 | 75 | 115 | 84 | -10.9% | -0.7% | 22.6% | 42.5% |
| Net Income | 31 | 21 | 49 | 29 | -19.3% | -51.0% | -1.3% | 16.6% |
Balance Sheet
|
|---|
| Cash | 45 | 156 | 144 | 211 | 65.7% | 644.6% | 164.0% | 213.2% |
| Short Term Debt | 149 | 83 | 126 | 92 | 77.6% | -39.3% | -5.6% | -30.9% |
| Long Term Debt | 356 | 1,023 | 979 | 929 | -5.2% | 294.5% | 276.1% | 299.7% |
Ratios
|
|---|
| Gross Margin | 53.9% | 53.6% | 54.2% | 54.5% | -1.3% | -0.4% | -0.2% | 0.4% |
| EBITDA Margin | 10.7% | 9.7% | 13.2% | 10.2% | -2.0% | -3.1% | -1.9% | -0.1% |
| Net Income Margin | 4.9% | 2.7% | 5.6% | 3.6% | -1.5% | -4.5% | -2.4% | -0.9% |
Revenue and profitability
Stantec Inc's Revenue jumped on 30.5%. Revenue growth showed acceleration in 16Q4 - it increased 44.5% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.6 pp from 7.9% to 4.2% in 2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue increased slightly on 1.4 pp from 41.6% to 43.1% in 2016.
Net Income marign decreased on 2.4 pp from 6.6% to 4.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 1.9%. CAPEX/Revenue decreased slightly on 0.99 pp from 2.9% in 2013 to 1.9% in 2016. Average CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at low ROIC (9.02%) and ROE (7.91%). ROIC decreased on 5.1 pp from 14.2% to 9.0% in 2016. ROE decreased on 5.1 pp from 13.0% to 7.9% in 2016.
Leverage (Debt)
Debt level is 2.4x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA surged on 1.4x from 1.0x to 2.4x in 2016. Debt surged on 179% while cash surged on 213%.
Management team
The company's CEO is Robert J Gomes "Bob". Robert J Gomes "Bob" is a founder and has 9 years tenure at the company.
Appendix 1: Peers in Industrial
Below you can find Stantec Inc benchmarking vs. other companies in Industrial 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 |
|---|
| Progressive Waste Solutions Ltd ($BIN) | | 16.1% | 7.8% | 1.8% | 59.4% |
| Baylin Technologies Inc ($BYL) | | 16.5% | -44.0% | -4.1% | 47.5% |
| CCL Industries Inc ($CCL.B) | | 44.4% | 36.8% | 17.5% | 30.8% |
| Avigilon Corp ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
| Ag Growth International Inc ($AFN) | | 13.5% | 12.2% | 12.3% | 21.6% |
| |
|---|
| Median (51 companies) | | 4.9% | 9.9% | 7.7% | 2.6% |
|---|
| Stantec Inc ($STN) | | 17.9% | 13.3% | 14.4% | 30.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($PUR) | 77.9% | 78.0% | 77.5% | 75.6% | |
| WSP Global Inc ($WSP) | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% |
| Avigilon Corp ($AVO) | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% |
| IWG Technologies Inc ($IWG) | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% |
| Progressive Waste Solutions Ltd ($BIN) | 42.4% | 44.8% | 45.2% | 44.4% | 42.0% |
| |
|---|
| Median (49 companies) | 23.4% | 23.4% | 20.9% | 21.5% | 22.1% |
|---|
| Stantec Inc ($STN) | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($CNR) | 46.5% | 45.9% | 46.8% | 50.9% | 54.3% |
| Canadian Pacific Railway Ltd ($CP) | 26.1% | 32.4% | 43.7% | 48.9% | 51.6% |
| Badger Daylighting Ltd ($BAD) | 25.7% | 25.9% | 27.9% | 24.6% | 24.2% |
| IWG Technologies Inc ($IWG) | 12.7% | 25.5% | 20.0% | 24.0% | 26.9% |
| Winpak Ltd ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| |
|---|
| Median (53 companies) | 10.2% | 8.3% | 8.0% | 7.8% | 11.1% |
|---|
| Stantec Inc ($STN) | 14.3% | 14.0% | 14.1% | 12.8% | 11.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($NAL) | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% |
| Cargojet Inc ($CJT.A) | 7.0% | 6.3% | 54.1% | 41.3% | |
| Algoma Central Corp ($ALC) | 15.9% | 7.3% | 5.0% | 27.4% | 58.2% |
| Canadian Pacific Railway Ltd ($CP) | 20.2% | 20.2% | 21.9% | 22.7% | 19.0% |
| Canadian National Railway Co ($CNR) | 17.4% | 18.7% | 18.9% | 21.5% | 22.4% |
| |
|---|
| Median (54 companies) | 3.2% | 3.7% | 4.4% | 3.9% | 4.8% |
|---|
| Stantec Inc ($STN) | 1.5% | 2.9% | 2.1% | 1.6% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($IBG) | 4.8% | -9.0% | 11.6% | 21.9% | 26.2% |
| IWG Technologies Inc ($IWG) | 17.0% | 36.3% | 23.4% | 27.2% | 25.7% |
| Winpak Ltd ($WPK) | 20.4% | 18.0% | 18.3% | 22.6% | 21.8% |
| Toromont Industries Ltd ($TIH) | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% |
| Intertape Polymer Group Inc ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| |
|---|
| Median (55 companies) | 12.2% | 9.6% | 11.0% | 8.3% | 9.2% |
|---|
| Stantec Inc ($STN) | 17.5% | 18.5% | 17.9% | 14.2% | 9.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($CFF) | | 2.7x | 6.1x | 35.9x | 3.6x |
| Ag Growth International Inc ($AFN) | 2.9x | -0.1x | 2.1x | 14.1x | |
| Cargojet Inc ($CJT.A) | 1.5x | 1.5x | 31.5x | 12.9x | |
| Progressive Waste Solutions Ltd ($BIN) | 4.5x | 3.3x | 2.9x | 10.6x | 3.8x |
| Finning International Inc ($FTT) | 2.3x | 1.8x | 1.4x | 9.4x | 2.5x |
| |
|---|
| Median (49 companies) | 1.5x | 1.6x | 1.3x | 1.0x | 1.8x |
|---|
| Stantec Inc ($STN) | 1.2x | 0.4x | 0.5x | 1.0x | 2.4x |
