WSP Global Inc EBITDA increased on 7.1% in 2016 and EBITDA Margin showed almost no change
01.03.2017 • About WSP Global Inc (
$WSP) • By InTwits
WSP Global Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- WSP Global Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's in pair with industry average of 24.1%.
- CAPEX is quite volatile: 109 in 2016, 88.1 in 2015, 39.6 in 2014, 22.3 in 2013, 16.6 in 2012
- The company has business model with low profitability: ROIC is at 7.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.8x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
WSP Global Inc ($WSP) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,258 | 2,016 | 2,902 | 6,064 | 6,380 | 5.2% |
| Gross Profit | 1,020 | 1,677 | 2,350 | 4,487 | 4,895 | 9.1% |
| EBITDA | 104 | 159 | 172 | 430 | 460 | 7.1% |
| Net Income | 46 | 72 | 63 | 189 | 199 | 5.5% |
Balance Sheet
|
|---|
| Cash | 128 | 132 | 202 | 204 | 231 | 13.1% |
| Short Term Debt | 10 | 6 | 11 | 143 | 136 | -4.7% |
| Long Term Debt | 221 | 188 | 788 | 847 | 914 | 8.0% |
Cash flow
|
|---|
| Capex | 17 | 22 | 40 | 88 | 109 | 23.5% |
Ratios
|
|---|
| Revenue growth | 92.9% | 60.3% | 44.0% | 108.9% | 5.2% | |
| EBITDA growth | 16.4% | 52.8% | 7.8% | 150.1% | 7.1% | |
| Gross Margin | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% | 2.7% |
| EBITDA Margin | 8.3% | 7.9% | 5.9% | 7.1% | 7.2% | 0.1% |
| Net Income Margin | 3.7% | 3.6% | 2.2% | 3.1% | 3.1% | 0.0% |
| CAPEX, % of revenue | 1.3% | 1.1% | 1.4% | 1.5% | 1.7% | 0.3% |
| ROIC | 7.5% | 8.5% | 4.5% | 8.3% | 7.5% | -0.8% |
| ROE | 6.5% | 7.6% | 4.0% | 7.5% | 6.9% | -0.6% |
| Net Debt/EBITDA | 1.0x | 0.4x | 3.5x | 1.8x | 1.8x | -0.0x |
WSP Global Inc ($WSP) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,483 | 1,546 | 1,553 | 1,798 | 5.6% | 3.2% | 3.3% | 8.3% |
| EBITDA | 84 | 119 | 139 | 120 | 11.2% | -20.8% | 26.9% | 28.5% |
| Net Income | 28 | 52 | 63 | 56 | -2.5% | -45.3% | 25.6% | 281.0% |
Balance Sheet
|
|---|
| Cash | 208 | 218 | 178 | 231 | 11.2% | -7.5% | -18.5% | 13.1% |
| Short Term Debt | 138 | 135 | 136 | 136 | 1,188.8% | 1,209.7% | 1,262.0% | -4.7% |
| Long Term Debt | 862 | 891 | 915 | 914 | -14.3% | 3.6% | 33.9% | 8.0% |
Ratios
|
|---|
| Gross Margin | 78.4% | 78.6% | 76.6% | 73.8% | 5.4% | 5.9% | 1.8% | -1.4% |
| EBITDA Margin | 5.6% | 7.7% | 8.9% | 6.7% | 0.3% | -2.3% | 1.7% | 1.1% |
| Net Income Margin | 1.9% | 3.4% | 4.1% | 3.1% | -0.2% | -3.0% | 0.7% | 2.2% |
Revenue and profitability
WSP Global Inc's Revenue increased on 5.2%. Revenue growth showed acceleration in 16Q4 - it increased 8.3% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.3 pp from 2.0% to 6.3% in 2016.
Gross Margin increased on 2.7 pp from 74.0% to 76.7% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 WSP Global Inc had CAPEX/Revenue of 1.7%. WSP Global Inc showed small growth in CAPEX/Revenue of 0.60 pp from 1.1% in 2013 to 1.7% in 2016. It's average CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at low ROIC (7.48%) and ROE (6.89%). ROIC decreased slightly on 0.79 pp from 8.3% to 7.5% in 2016. ROE decreased slightly on 0.56 pp from 7.5% to 6.9% in 2016.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 2.3x Debt / EBITDA. Net Debt / EBITDA decreased on 0.048x from 1.8x to 1.8x in 2016. Debt increased on 6.1% while cash surged on 13.1%.
Management team
WSP Global Inc's CEO Alexandre L'Heureux is a founder and has spent 2 years at the company. The company's CFO is Bruno Roy. Bruno Roy has 2 years tenure at the company.
Appendix 1: Peers in Industrial
Below we provide WSP Global Inc benchmarking against other companies in Industrial 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 |
|---|
| 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 ($STN) | | 17.9% | 13.3% | 14.4% | 30.5% |
| Avigilon Corp ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
| |
|---|
| Median (51 companies) | | 4.9% | 9.9% | 7.7% | 2.6% |
|---|
| WSP Global Inc ($WSP) | | 60.3% | 44.0% | 108.9% | 5.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($PUR) | 77.9% | 78.0% | 77.5% | 75.6% | |
| Avigilon Corp ($AVO) | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% |
| Stantec Inc ($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% |
|---|
| WSP Global Inc ($WSP) | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($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) | 10.5% | 8.4% | 8.6% | 9.5% | 11.1% |
|---|
| WSP Global Inc ($WSP) | 8.3% | 7.9% | 5.9% | 7.1% | 7.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($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% | 3.9% | 4.8% |
|---|
| WSP Global Inc ($WSP) | 1.3% | 1.1% | 1.4% | 1.5% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($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% | 9.7% | 11.5% | 8.9% | 9.7% |
|---|
| WSP Global Inc ($WSP) | 7.5% | 8.5% | 4.5% | 8.3% | 7.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($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 | 1.2x | 1.0x | 2.1x |
|---|
| WSP Global Inc ($WSP) | 1.0x | 0.4x | 3.5x | 1.8x | 1.8x |
