Cascades Inc reports 20.4% EBITDA growth and 1.4 pp EBITDA Margin growth from 8.9% to 10.3%
02.03.2017 • About Cascades Inc (
$CAS) • By InTwits
Cascades Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cascades Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.5%. At the same time it's in pair with industry average of 7.1%.
- CAPEX is quite volatile: 925 in 2016, 906 in 2015, 741 in 2014, 715 in 2013, 269 in 2012
- The company has business model with low profitability: ROIC is at 8.1%
- It operates with high leverage: Net Debt/EBITDA is 3.7x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cascades Inc ($CAS) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,645 | 3,370 | 3,561 | 3,861 | 4,001 | 3.6% |
| Gross Profit | 488 | 507 | 498 | 600 | 621 | 3.5% |
| SG&A | 382 | 335 | 334 | 360 | 402 | 11.7% |
| EBITDA | 274 | 343 | 311 | 343 | 413 | 20.4% |
| Net Income | -22 | 11 | -147 | -65 | 135 | |
Balance Sheet
|
|---|
| Cash | 20 | 23 | 29 | 60 | 62 | 3.3% |
| Short Term Debt | 140 | 95 | 86 | 71 | 64 | -9.9% |
| Long Term Debt | 1,415 | 1,540 | 1,556 | 1,710 | 1,530 | -10.5% |
Cash flow
|
|---|
| Capex | 161 | 138 | 178 | 163 | 182 | 11.7% |
Ratios
|
|---|
| Revenue growth | 0.6% | -7.5% | 5.7% | 8.4% | 3.6% | |
| EBITDA growth | 45.7% | 25.2% | -9.3% | 10.3% | 20.4% | |
| Gross Margin | 13.4% | 15.0% | 14.0% | 15.5% | 15.5% | -0.0% |
| EBITDA Margin | 7.5% | 10.2% | 8.7% | 8.9% | 10.3% | 1.4% |
| Net Income Margin | -0.6% | 0.3% | -4.1% | -1.7% | 3.4% | 5.1% |
| SG&A, % of revenue | 10.5% | 9.9% | 9.4% | 9.3% | 10.0% | 0.7% |
| CAPEX, % of revenue | 4.4% | 4.1% | 5.0% | 4.2% | 4.5% | 0.3% |
| ROIC | 2.9% | 6.5% | 5.0% | 5.7% | 8.1% | 2.4% |
| ROE | -2.2% | 1.1% | -14.9% | -7.4% | 14.6% | 22.0% |
| Net Debt/EBITDA | 5.6x | 4.7x | 5.2x | 5.0x | 3.7x | -1.3x |
Cascades Inc ($CAS) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,003 | 998 | 1,021 | 979 | 10.2% | 5.1% | -0.5% | 0.4% |
| EBITDA | 120 | 112 | 98 | 83 | 66.7% | 6.7% | -19.7% | 88.6% |
| Net Income | 75 | 36 | 20 | 4 | | 50.0% | -9.1% | |
Balance Sheet
|
|---|
| Cash | 68 | 29 | 37 | 62 | 142.9% | 20.8% | 8.8% | 3.3% |
| Short Term Debt | 66 | 68 | 68 | 64 | -84.1% | -83.5% | 13.3% | -9.9% |
| Long Term Debt | 1,686 | 1,625 | 1,594 | 1,530 | 29.4% | 24.4% | -7.1% | -10.5% |
Ratios
|
|---|
| Gross Margin | 15.7% | 16.4% | 15.9% | 14.1% | 1.8% | 0.7% | -1.3% | -1.2% |
| EBITDA Margin | 12.0% | 11.2% | 9.6% | 8.5% | 4.1% | 0.2% | -2.3% | 4.0% |
| Net Income Margin | 7.5% | 3.6% | 2.0% | 0.4% | 11.3% | 1.1% | -0.2% | 8.2% |
Revenue and profitability
Cascades Inc's Revenue increased on 3.6%. Revenue growth showed slow down in FY16Q4 - it was 0.4% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.4 pp from 8.9% to 10.3% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased slightly on 0.72 pp from 9.3% to 10.0% in FY2016.
Net Income marign increased on 5.1 pp from -1.7% to 3.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 4.5%. Cascades Inc showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 4.6%.
Return on investment
The company operates at good ROE (14.59%) while ROIC is low (8.07%). ROIC increased on 2.4 pp from 5.7% to 8.1% in FY2016. ROE jumped on 22.0 pp from -7.4% to 14.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.7x and Debt / EBITDA is 3.9x. Net Debt / EBITDA dropped on 1.3x from 5.0x to 3.7x in FY2016. Debt dropped on 10.5% while cash increased on 3.3%.
Management team
The company's CEO is Mario Plourde. Mario Plourde is a founder and has 5 years tenure at the company. Cascades Inc's CFO Allan Hogg has spent 8 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide Cascades Inc benchmarking against other companies in Basic Materials 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 |
|---|
| Avino Silver & Gold Mines Ltd ($ASM) | | 613.6% | 19.9% | -1.1% | 109.1% |
| Trevali Mining Corp ($TV) | | | | 12.9% | 86.4% |
| Geodrill Ltd ($GEO) | | -43.3% | -4.3% | 34.6% | 53.1% |
| Tahoe Resources Inc ($THO) | | | | 48.4% | 50.9% |
| Osisko Gold Royalties Ltd ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -2.5% | 1.8% | -2.9% | 6.8% |
|---|
| Cascades Inc ($CAS) | | -7.5% | 5.7% | 8.4% | 3.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($NSU) | 89.9% | 94.8% | 95.5% | 82.3% | 79.7% |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.3% | 80.3% |
| Lucara Diamond Corp ($LUC) | 42.5% | 57.4% | 66.7% | 60.9% | 65.6% |
| Trevali Mining Corp ($TV) | | | 49.0% | 59.3% | |
| Perseus Mining Ltd ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.2% | 22.7% | 19.1% | 16.9% | 24.8% |
|---|
| Cascades Inc ($CAS) | 13.4% | 15.0% | 14.0% | 15.5% | 15.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($LIF) | | | | 72.8% | 73.5% |
| Silver Wheaton Corp ($SLW) | 82.6% | 75.3% | 69.6% | 65.8% | 59.7% |
| Franco-Nevada Corp ($FNV) | 62.1% | 44.6% | 72.3% | 60.8% | 70.3% |
| Lucara Diamond Corp ($LUC) | 7.6% | 57.3% | 57.5% | 60.0% | 62.4% |
| Sandstorm Gold Ltd ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 18.6% | 11.5% | 10.7% | 6.7% | 24.5% |
|---|
| Cascades Inc ($CAS) | 7.5% | 10.2% | 8.7% | 8.9% | 10.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($LGO) | | | | 567.6% | |
| Sandstorm Gold Ltd ($SSL) | 152.1% | 118.8% | 49.4% | 412.7% | 17.3% |
| Silver Wheaton Corp ($SLW) | 75.5% | 286.8% | 22.5% | 279.2% | 90.3% |
| Franco-Nevada Corp ($FNV) | 3.7% | 35.5% | 201.6% | 230.0% | 122.4% |
| Avino Silver & Gold Mines Ltd ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 28.1% | 27.4% | 17.8% | 17.2% | 18.3% |
|---|
| Cascades Inc ($CAS) | 4.4% | 4.1% | 5.0% | 4.2% | 4.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($LUC) | -2.9% | 41.3% | 54.7% | 39.6% | 58.5% |
| Western Forest Products Inc ($WEF) | 9.0% | 25.1% | 15.7% | 16.4% | 25.1% |
| Geodrill Ltd ($GEO) | 8.6% | -3.5% | -9.3% | 3.6% | 20.3% |
| Supremex Inc ($SXP) | 14.1% | 18.5% | 16.5% | 23.4% | 19.3% |
| Canfor Pulp Products Inc ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.0% |
|---|
| Cascades Inc ($CAS) | 2.9% | 6.5% | 5.0% | 5.7% | 8.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($CAM) | 4.2x | 2.6x | 3.2x | 1.8x | 13.9x |
| Taseko Mines Ltd ($TKO) | 7.4x | 5.9x | 10.2x | 5.9x | 11.0x |
| Methanex Corp ($MX) | 5.2x | 0.7x | 0.9x | 3.0x | 5.2x |
| Copper Mountain Mining Corp ($CUM) | 3.9x | 5.0x | 5.4x | 30.6x | 5.1x |
| Cameco Corp ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.7x | 1.1x | 1.5x | 0.6x |
|---|
| Cascades Inc ($CAS) | 5.6x | 4.7x | 5.2x | 5.0x | 3.7x |
