Magna International Inc reports 19.1% EBITDA growth and 13.4% Revenue growth
24.02.2017 • About Magna International Inc (
$MG) • By InTwits
Magna International Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Magna International Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 906 in FY2016, 635 in FY2015, 529 in FY2014, 537 in FY2013, 317 in FY2012
- The company has highly profitable business model: ROIC is at 21.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Magna International Inc ($MG) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 30,837 | 34,835 | 34,403 | 32,134 | 36,445 | 13.4% |
| Gross Profit | 3,818 | 4,548 | 4,935 | 4,575 | 5,322 | 16.3% |
| SG&A | 1,510 | 1,616 | 1,612 | 1,448 | 1,601 | 10.6% |
| EBITDA | 2,421 | 3,070 | 3,455 | 3,237 | 3,856 | 19.1% |
| Net Income | 1,433 | 1,561 | 1,882 | 2,013 | 2,031 | 0.9% |
Balance Sheet
|
|---|
| Cash | 1,522 | 1,554 | 1,249 | 2,863 | 974 | -66.0% |
| Short Term Debt | 320 | 271 | 213 | 236 | 762 | 222.9% |
| Long Term Debt | 112 | 102 | 812 | 2,327 | 2,394 | 2.9% |
Cash flow
|
|---|
| Capex | 1,274 | 1,169 | 1,495 | 1,591 | 1,807 | 13.6% |
Ratios
|
|---|
| Revenue growth | 7.3% | 13.0% | -1.2% | -6.6% | 13.4% | |
| EBITDA growth | 20.3% | 26.8% | 12.5% | -6.3% | 19.1% | |
| Gross Margin | 12.4% | 13.1% | 14.3% | 14.2% | 14.6% | 0.4% |
| EBITDA Margin | 7.9% | 8.8% | 10.0% | 10.1% | 10.6% | 0.5% |
| Net Income Margin | 4.6% | 4.5% | 5.5% | 6.3% | 5.6% | -0.7% |
| SG&A, % of revenue | 4.9% | 4.6% | 4.7% | 4.5% | 4.4% | -0.1% |
| CAPEX, % of revenue | 4.1% | 3.4% | 4.3% | 5.0% | 5.0% | 0.0% |
| ROIC | 16.3% | 18.6% | 25.2% | 21.9% | 21.2% | -0.7% |
| ROE | 16.3% | 16.4% | 20.6% | 22.8% | 21.7% | -1.2% |
| Net Debt/EBITDA | -0.5x | -0.4x | -0.1x | -0.1x | 0.6x | 0.7x |
Magna International Inc ($MG) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 8,900 | 9,443 | 8,849 | 9,253 | 14.5% | 16.1% | 15.5% | 8.0% |
| EBITDA | 922 | 1,016 | 955 | 963 | 15.7% | 19.5% | 28.7% | 13.6% |
| Net Income | 492 | 558 | 503 | 478 | 5.8% | 15.5% | -14.6% | 0.4% |
Balance Sheet
|
|---|
| Cash | 625 | 597 | 364 | 974 | -44.8% | -48.7% | -81.9% | -66.0% |
| Short Term Debt | 661 | 864 | 832 | 762 | 169.8% | 254.1% | 340.2% | 222.9% |
| Long Term Debt | 2,500 | 2,454 | 2,450 | 2,394 | 213.7% | 208.3% | 69.9% | 2.9% |
Ratios
|
|---|
| Gross Margin | 14.4% | 14.8% | 14.6% | 14.6% | 0.2% | 0.4% | 0.6% | 0.2% |
| EBITDA Margin | 10.4% | 10.8% | 10.8% | 10.4% | 0.1% | 0.3% | 1.1% | 0.5% |
| Net Income Margin | 5.5% | 5.9% | 5.7% | 5.2% | -0.5% | -0.0% | -2.0% | -0.4% |
Revenue and profitability
Magna International Inc's Revenue surged on 13.4%. Revenue growth showed slow down in 16Q4 - it was 8.0% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.5 pp from 5.1% to 6.7% in FY2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign decreased slightly on 0.69 pp from 6.3% to 5.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
Magna International Inc's CAPEX/Revenue was 5.0% in 2016. Magna International Inc showed small growth in CAPEX/Revenue of 1.6 pp from 3.4% in 2013 to 5.0% in 2016. It's average CAPEX/Revenue for the last three years was 4.8%.
Return on investment
The company operates at high and attractive ROIC (21.19%) and ROE (21.68%). ROIC decreased slightly on 0.71 pp from 21.9% to 21.2% in 2016. ROE decreased slightly on 1.2 pp from 22.8% to 21.7% in 2016.
Leverage (Debt)
Debt level is 0.6x Net Debt / EBITDA and 0.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.7x from -0.1x to 0.6x in 2016. Debt jumped on 23.1% while cash dropped on 66.0%.
Management team
Magna International Inc's CEO is Donald J Walker "Don". Donald J Walker "Don" has 24 years tenure at the company. The company's CFO Vincent J Galifi has spent 21 years at the company.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Magna International Inc benchmarking against other companies in Consumer, 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 |
|---|
| 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 ($CWX) | | 2.1% | 4.6% | 8.6% | 18.6% |
| |
|---|
| Median (35 companies) | | 4.7% | 7.2% | 7.5% | 4.6% |
|---|
| Magna International Inc ($MG) | | 13.0% | -1.2% | -6.6% | 13.4% |
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 ($ICE) | 71.6% | 69.7% | 70.7% | 78.2% | |
| |
|---|
| Median (36 companies) | 38.1% | 34.2% | 33.5% | 32.6% | 36.2% |
|---|
| Magna International Inc ($MG) | 12.4% | 13.1% | 14.3% | 14.2% | 14.6% |
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 ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (38 companies) | 8.6% | 10.2% | 12.4% | 11.0% | 15.4% |
|---|
| Magna International Inc ($MG) | 7.9% | 8.8% | 10.0% | 10.1% | 10.6% |
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 ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | 29.7% |
| |
|---|
| Median (41 companies) | 2.7% | 2.9% | 3.3% | 3.2% | 4.9% |
|---|
| Magna International Inc ($MG) | 4.1% | 3.4% | 4.3% | 5.0% | 5.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($TOY) | | 19.2% | 56.9% | 48.2% | 44.5% |
| Linamar Corp ($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% |
| Uni-Select Inc ($UNS) | 4.8% | 3.4% | 9.6% | -11.1% | 17.0% |
| |
|---|
| Median (41 companies) | 10.2% | 12.4% | 10.8% | 10.2% | 11.0% |
|---|
| Magna International Inc ($MG) | 16.3% | 18.6% | 25.2% | 21.9% | 21.2% |
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 ($PSG) | 2.6x | 3.5x | 12.2x | 6.5x | |
| |
|---|
| Median (34 companies) | 2.1x | 2.8x | 2.4x | 2.6x | 2.1x |
|---|
| Magna International Inc ($MG) | -0.5x | -0.4x | -0.1x | -0.1x | 0.6x |
