Onex Corp Debt surged on 26.6% in 2016 and Net Debt / EBITDA jumped on 1.4x from 8.8x to 10.2x
24.02.2017 • About Onex Corp (
$OCX) • By InTwits
Onex Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Onex Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's a lot of higher than industry average of 6.8%.
- CAPEX is quite volatile: 1,073 in 2016, 2,994 in 2015, 5,290 in 2014, 6,297 in 2013, 5,478 in 2012
- The company has potentially unprofitable business model: ROIC is at 3.2%
- It operates with high leverage: Net Debt/EBITDA is 10.2x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Onex Corp ($OCX) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 24,917 | 19,824 | 16,880 | 19,681 | 22,523 | 14.4% |
| Gross Profit | 5,009 | 5,194 | 4,717 | 6,099 | 6,827 | 11.9% |
| EBITDA | 1,429 | 1,098 | 1,288 | 1,790 | 2,002 | 11.8% |
| Net Income | -128 | -354 | -115 | -573 | -130 | |
Balance Sheet
|
|---|
| Cash | 2,656 | 3,191 | 3,764 | 2,313 | 2,371 | 2.5% |
| Short Term Debt | 286 | 651 | 408 | 411 | 407 | -1.0% |
| Long Term Debt | 10,184 | 11,319 | 12,874 | 17,643 | 22,456 | 27.3% |
Cash flow
|
|---|
| Capex | 607 | 568 | 467 | 704 | 569 | -19.2% |
Ratios
|
|---|
| Revenue growth | 1.1% | -20.4% | -14.9% | 16.6% | 14.4% | |
| EBITDA growth | -14.1% | -23.2% | 17.3% | 39.0% | 11.8% | |
| Gross Margin | 20.1% | 26.2% | 27.9% | 31.0% | 30.3% | -0.7% |
| EBITDA Margin | 5.7% | 5.5% | 7.6% | 9.1% | 8.9% | -0.2% |
| Net Income Margin | -0.5% | -1.8% | -0.7% | -2.9% | -0.6% | 2.3% |
| CAPEX, % of revenue | 2.4% | 2.9% | 2.8% | 3.6% | 2.5% | -1.1% |
| ROIC | 3.7% | 1.0% | 2.9% | 3.9% | 3.2% | -0.6% |
| ROE | -7.5% | -25.5% | -11.7% | | | 0.0% |
| Net Debt/EBITDA | 5.5x | 8.0x | 7.4x | 8.8x | 10.2x | 1.4x |
Onex Corp ($OCX) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 4,998 | 5,425 | 5,528 | 6,572 | 21.0% | 10.1% | 6.6% | 20.8% |
| EBITDA | 497 | 366 | 573 | 575 | 48.4% | -30.6% | 9.4% | 56.3% |
| Net Income | -187 | 322 | -130 | -135 | | | -169.9% | |
Balance Sheet
|
|---|
| Cash | 1,861 | 2,021 | 2,045 | 2,371 | -44.1% | -20.4% | -11.6% | 2.5% |
| Short Term Debt | 497 | 418 | 654 | 407 | -13.1% | -17.7% | -4.4% | -1.0% |
| Long Term Debt | 17,699 | 18,227 | 19,016 | 22,456 | 10.1% | 14.7% | 7.8% | 27.3% |
Ratios
|
|---|
| Gross Margin | 31.1% | 30.3% | 30.5% | 29.6% | -0.1% | -1.3% | -0.9% | -0.2% |
| EBITDA Margin | 9.9% | 6.7% | 10.4% | 8.7% | 1.8% | -4.0% | 0.3% | 2.0% |
| Net Income Margin | -3.7% | 5.9% | -2.4% | -2.1% | -1.2% | 12.1% | -5.9% | 4.3% |
Revenue and profitability
The company's Revenue surged on 14.4%. Revenue growth showed acceleration in 16Q4 - it increased 20.8% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.2 pp from 13.0% to 7.8% in 2016.
Gross Margin decreased slightly on 0.68 pp from 31.0% to 30.3% in 2016.
Net Income marign increased on 2.3 pp from -2.9% to -0.58% in 2016.
Capital expenditures (CAPEX) and working capital investments
Onex Corp's CAPEX/Revenue was 2.5% in 2016. Onex Corp's CAPEX/Revenue showed almost no change from 2013 to 2016. It's average level of CAPEX/Revenue for the last three years was 3.0%.
Leverage (Debt)
Debt level is 10.2x Net Debt / EBITDA and 11.4x Debt / EBITDA. Net Debt / EBITDA surged on 1.4x from 8.8x to 10.2x in 2016. Debt surged on 26.6% while cash increased on 2.5%.
Management team
The company's CEO is Gerald W Schwartz. Gerald W Schwartz is a founder and has 35 years tenure at the company. Onex Corp's CFO is Christopher A Govan. Christopher A Govan has 3 years tenure at the company.
Appendix 1: Peers in Financial
Below you can find Onex Corp benchmarking vs. other companies in Financial 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 |
|---|
| Grenville Strategic Royalty Corp ($GRC) | | | | 317.2% | |
| StorageVault Canada Inc ($SVI) | | 22.2% | 7.5% | 111.8% | |
| Slate Retail REIT ($SRT.UN) | | 316.8% | 229.7% | 92.5% | 21.6% |
| Mogo Finance Technology Inc ($GO) | | 13.7% | 34.6% | 86.0% | 14.6% |
| Morguard Corp ($MRC) | | 27.2% | 9.2% | 58.8% | 4.6% |
| |
|---|
| Median (53 companies) | | 7.5% | 9.1% | 3.0% | 5.1% |
|---|
| Onex Corp ($OCX) | | -20.4% | -14.9% | 16.6% | 14.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($OLY) | 80.9% | 82.6% | 83.2% | 84.5% | 83.5% |
| Morguard Corp ($MRC) | 74.0% | 69.9% | 68.6% | 76.5% | 75.5% |
| Mogo Finance Technology Inc ($GO) | 70.4% | 64.5% | 63.4% | 62.3% | |
| StorageVault Canada Inc ($SVI) | 18.2% | 22.6% | 18.3% | 52.4% | |
| Clarke Inc ($CKI) | 28.1% | 20.0% | 18.9% | 43.4% | 41.6% |
| |
|---|
| Median (8 companies) | 38.3% | 41.5% | 28.6% | 47.9% | 35.4% |
|---|
| Onex Corp ($OCX) | 20.1% | 26.2% | 27.9% | 31.0% | 30.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 87.6% | 87.9% | 88.8% | 86.6% | |
| Equitable Group Inc ($EQB) | 88.1% | 87.4% | 86.0% | 84.7% | 83.0% |
| Atrium Mortgage Investment Corp ($AI) | 79.8% | | | 81.9% | 83.2% |
| Trez Capital Mortgage Investment Corp ($TZZ) | | | | 76.2% | |
| First National Financial Corp ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| |
|---|
| Median (36 companies) | 43.9% | 35.0% | 41.4% | 36.2% | 45.4% |
|---|
| Onex Corp ($OCX) | 5.7% | 5.5% | 7.6% | 9.1% | 8.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dundee Corp ($DC.A) | 10.3% | 14.1% | 88.8% | 123.6% | |
| Gazit-Globe Ltd ($GZT) | 80.2% | 43.3% | 52.1% | 69.3% | 95.5% |
| First Capital Realty Inc ($FCR) | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% |
| Killam Properties Inc ($KMP) | 80.7% | 114.1% | 143.5% | 46.7% | 59.9% |
| StorageVault Canada Inc ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| |
|---|
| Median (55 companies) | 0.5% | 0.5% | 0.6% | 0.7% | 0.6% |
|---|
| Onex Corp ($OCX) | 2.4% | 2.9% | 2.8% | 3.6% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CI Financial Corp ($CIX) | | | | | 24.1% |
| FirstService Corp ($FSV) | | | | | 17.4% |
| IGM Financial Inc ($IGM) | 14.2% | 14.2% | 13.7% | 13.7% | 13.1% |
| Alaris Royalty Corp ($AD) | 9.5% | 10.1% | 10.7% | 7.3% | 12.3% |
| Genworth MI Canada Inc ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (55 companies) | 4.8% | 4.3% | 4.3% | 2.8% | 3.0% |
|---|
| Onex Corp ($OCX) | 3.7% | 1.0% | 2.9% | 3.9% | 3.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Element Financial Corp ($EFN) | 140.2x | 31.9x | 37.6x | 79.9x | 22.6x |
| First National Financial Corp ($FN) | 34.3x | 33.7x | 40.9x | 37.4x | |
| StorageVault Canada Inc ($SVI) | 11.2x | 9.7x | 13.6x | 35.7x | |
| Gazit-Globe Ltd ($GZT) | 12.8x | 12.7x | 15.3x | 22.1x | 15.2x |
| Equitable Group Inc ($EQB) | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x |
| |
|---|
| Median (27 companies) | 5.2x | 4.4x | 4.5x | 5.6x | 6.0x |
|---|
| Onex Corp ($OCX) | 5.5x | 8.0x | 7.4x | 8.8x | 10.2x |
