Avigilon Corp reports 67.5% Net Income decline and 2.8 pp EBITDA Margin decline from 15.0% to 12.2%
28.02.2017 • About Avigilon Corp (
$AVO) • By InTwits
Avigilon Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Avigilon Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.3%. At the same time it's in pair with industry average of 7.1%.
- CAPEX is quite volatile: 19.5 in 2016, 50.0 in 2015, 6.9 in 2014, 6.0 in 2013, 2.2 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Avigilon Corp ($AVO) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 100.3 | 173.2 | 245.8 | 289.3 | 353.6 | 22.2% |
| Gross Profit | 49.5 | 93.9 | 139.2 | 166.0 | 184.0 | 10.8% |
| SG&A | 33.9 | 58.0 | 86.7 | 113.2 | 125.9 | 11.3% |
| EBITDA | 11.4 | 29.6 | 40.8 | 43.3 | 43.0 | -0.6% |
| Net Income | 7.2 | 20.9 | 31.8 | 22.1 | 7.2 | -67.5% |
Balance Sheet
|
|---|
| Cash | 50.1 | 98.7 | 63.0 | 18.7 | 30.0 | 60.7% |
| Short Term Debt | 0.1 | 0.2 | 0.2 | 16.3 | 17.3 | 6.0% |
| Long Term Debt | 0.4 | 0.6 | 0.4 | 74.5 | 83.6 | 12.2% |
Cash flow
|
|---|
| Capex | 2.2 | 6.0 | 6.9 | 50.0 | 19.5 | -61.0% |
Ratios
|
|---|
| Revenue growth | 65.2% | 72.6% | 41.9% | 17.7% | 22.2% | |
| EBITDA growth | | 161.1% | 37.5% | 6.2% | -0.6% | |
| Gross Margin | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% | -5.4% |
| EBITDA Margin | 11.3% | 17.1% | 16.6% | 15.0% | 12.2% | -2.8% |
| Net Income Margin | 7.2% | 12.1% | 12.9% | 7.6% | 2.0% | -5.6% |
| SG&A, % of revenue | 33.8% | 33.5% | 35.3% | 39.1% | 35.6% | -3.5% |
| CAPEX, % of revenue | 2.2% | 3.5% | 2.8% | 17.3% | 5.5% | -11.8% |
| ROIC | 20.1% | 22.2% | 15.9% | 10.0% | 6.2% | -3.8% |
| ROE | 13.6% | 18.2% | 15.1% | 9.4% | 3.2% | -6.3% |
| Net Debt/EBITDA | -4.4x | -3.3x | -1.5x | 1.7x | 1.6x | -0.0x |
Avigilon Corp ($AVO) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 70 | 86 | 96 | 102 | 15.5% | 17.4% | 31.8% | 25.0% |
| EBITDA | 7 | 5 | 12 | 19 | -6.0% | -50.4% | -2.3% | 45.5% |
| Net Income | 1 | -2 | 3 | 4 | -84.9% | -207.0% | -51.1% | 1.4% |
Balance Sheet
|
|---|
| Cash | 12 | 22 | 35 | 30 | -76.2% | -71.1% | -42.3% | 60.7% |
| Short Term Debt | 17 | 17 | 17 | 17 | 8,332.2% | 10.2% | 6.6% | 6.0% |
| Long Term Debt | 81 | 87 | 93 | 84 | 10,891.5% | 45.7% | 65.3% | 12.2% |
Ratios
|
|---|
| Gross Margin | 56.7% | 50.1% | 51.4% | 51.0% | -2.5% | -7.8% | -5.5% | -5.0% |
| EBITDA Margin | 9.7% | 5.8% | 12.8% | 18.6% | -2.2% | -7.9% | -4.5% | 2.6% |
| Net Income Margin | 1.9% | -2.3% | 3.6% | 4.3% | -12.8% | -4.8% | -6.1% | -1.0% |
Revenue and profitability
The company's Revenue surged on 22.2%. Revenue growth showed acceleration in 16Q4 - it increased 25.0% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.8 pp from 15.0% to 12.2% in 2016.
Gross Margin decreased on 5.4 pp from 57.4% to 52.0% in 2016. SG&A as a % of Revenue decreased on 3.5 pp from 39.1% to 35.6% in 2016.
Net Income marign decreased on 5.6 pp from 7.6% to 2.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Avigilon Corp had CAPEX/Revenue of 5.5%. Avigilon Corp showed CAPEX/Revenue growth of 2.0 pp from 3.5% in 2013 to 5.5% in 2016. Average CAPEX/Revenue for the last three years was 8.5%.
Return on investment
The company operates at low ROIC (6.22%) and ROE (3.18%). ROIC decreased on 3.8 pp from 10.0% to 6.2% in 2016. ROE decreased on 6.3 pp from 9.4% to 3.2% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.6x and Debt / EBITDA is 2.3x. Net Debt / EBITDA decreased slightly on 0.019x from 1.7x to 1.6x in 2016. Debt surged on 11.1% while cash surged on 60.7%.
Management team
Alexander Fernandes is a the company's CEO. Alexander Fernandes is a founder and has spent 12 years at the company. Ric Leong is a Avigilon Corp's CFO. Ric Leong has spent 3 years at the company.
Appendix 1: Peers in Industrial
Below you can find Avigilon Corp 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 ($CCL.B) | | 44.4% | 36.8% | 17.5% | 30.8% |
| Stantec Inc ($STN) | | 17.9% | 13.3% | 14.4% | 30.5% |
| Ag Growth International Inc ($AFN) | | 13.5% | 12.2% | 12.3% | 21.6% |
| |
|---|
| Median (51 companies) | | 4.9% | 9.9% | 7.7% | 2.6% |
|---|
| Avigilon Corp ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
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% |
| Stantec Inc ($STN) | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% |
| IWG Technologies Inc ($IWG) | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% |
| Progressive Waste Solutions Ltd ($BIN) | 42.4% | 44.8% | 45.2% | 44.4% | 42.0% |
| |
|---|
| Median (49 companies) | 23.4% | 23.4% | 20.9% | 21.5% | 22.1% |
|---|
| Avigilon Corp ($AVO) | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% |
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 ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| |
|---|
| Median (53 companies) | 10.2% | 8.3% | 8.0% | 7.8% | 11.0% |
|---|
| Avigilon Corp ($AVO) | 11.3% | 17.1% | 16.6% | 15.0% | 12.2% |
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 ($CNR) | 17.4% | 18.7% | 18.9% | 21.5% | 22.4% |
| |
|---|
| Median (54 companies) | 3.2% | 3.7% | 4.4% | 3.7% | 3.9% |
|---|
| Avigilon Corp ($AVO) | 2.2% | 3.5% | 2.8% | 17.3% | 5.5% |
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 ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| |
|---|
| Median (55 companies) | 12.2% | 9.6% | 11.0% | 8.3% | 9.7% |
|---|
| Avigilon Corp ($AVO) | 20.1% | 22.2% | 15.9% | 10.0% | 6.2% |
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 ($FTT) | 2.3x | 1.8x | 1.4x | 9.4x | 2.5x |
| |
|---|
| Median (49 companies) | 1.5x | 1.6x | 1.3x | 1.0x | 2.1x |
|---|
| Avigilon Corp ($AVO) | -4.4x | -3.3x | -1.5x | 1.7x | 1.6x |
