George Weston Ltd EBITDA increased on 8.1% in 2016 and EBITDA Margin showed almost no change
02.03.2017 • About George Weston Ltd (
$WN) • By InTwits
George Weston Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- George Weston Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 5,768,000 in FY2016, 8,548,933 in FY2015, 8,923,568 in FY2014, 14,227,777 in FY2013, 15,467,862 in FY2012
- The company has business model with low profitability: ROIC is at 7.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
George Weston Ltd ($WN) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 32,742 | 33,582 | 43,918 | 46,894 | 47,999 | 2.4% |
| Gross Profit | 8,042 | 8,291 | 11,191 | 13,227 | 13,891 | 5.0% |
| SG&A | 6,649 | 6,675 | 10,218 | 11,298 | 11,636 | 3.0% |
| EBITDA | 2,233 | 2,507 | 2,515 | 3,615 | 3,909 | 8.1% |
| Net Income | 475 | 672 | 126 | 511 | 550 | 7.6% |
Balance Sheet
|
|---|
| Cash | 1,589 | 2,869 | 1,333 | 1,413 | 1,560 | 10.4% |
| Short Term Debt | 1,991 | 2,268 | 1,683 | 2,577 | 1,756 | -31.9% |
| Long Term Debt | 6,261 | 7,736 | 12,306 | 10,928 | 11,385 | 4.2% |
Cash flow
|
|---|
| Capex | 1,110 | 976 | 984 | 1,267 | 1,129 | -10.9% |
Ratios
|
|---|
| Revenue growth | 1.1% | 2.6% | 30.8% | 6.8% | 2.4% | |
| EBITDA growth | -5.8% | 12.3% | 0.3% | 43.7% | 8.1% | |
| Gross Margin | 24.6% | 24.7% | 25.5% | 28.2% | 28.9% | 0.7% |
| EBITDA Margin | 6.8% | 7.5% | 5.7% | 7.7% | 8.1% | 0.4% |
| Net Income Margin | 1.5% | 2.0% | 0.3% | 1.1% | 1.1% | 0.1% |
| SG&A, % of revenue | 20.3% | 19.9% | 23.3% | 24.1% | 24.2% | 0.1% |
| CAPEX, % of revenue | 3.4% | 2.9% | 2.2% | 2.7% | 2.4% | -0.3% |
| ROIC | 8.8% | 9.2% | 4.0% | 6.3% | 7.4% | 1.0% |
| ROE | 8.3% | 12.1% | 1.4% | 7.0% | 7.3% | 0.3% |
| Net Debt/EBITDA | 3.0x | 2.8x | 5.0x | 3.3x | 3.0x | -0.4x |
George Weston Ltd ($WN) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 10,800 | 11,075 | 14,605 | 11,519 | 3.8% | 2.1% | 1.5% | 2.4% |
| EBITDA | 852 | 895 | 1,279 | 883 | -6.1% | 10.4% | 19.0% | 7.4% |
| Net Income | 47 | 143 | 268 | 92 | -71.9% | 180.4% | 66.5% | -37.8% |
Balance Sheet
|
|---|
| Cash | 1,711 | 1,564 | 1,863 | 1,560 | 22.8% | -1.8% | 16.1% | 10.4% |
| Short Term Debt | 2,221 | 1,953 | 1,949 | 1,756 | 26.6% | -15.3% | -27.6% | -31.9% |
| Long Term Debt | 11,310 | 11,334 | 11,328 | 11,385 | -7.2% | 0.1% | 2.7% | 4.2% |
Ratios
|
|---|
| Gross Margin | 29.3% | 28.8% | 28.6% | 29.3% | 0.6% | 0.5% | 0.9% | 0.8% |
| EBITDA Margin | 7.9% | 8.1% | 8.8% | 7.7% | -0.8% | 0.6% | 1.3% | 0.4% |
| Net Income Margin | 0.4% | 1.3% | 1.8% | 0.8% | -1.2% | 0.8% | 0.7% | -0.5% |
Revenue and profitability
The company's Revenue increased on 2.4%. Revenue growth showed acceleration in 16Q4 - it increased 2.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 8.2 pp from 53.0% to 44.8% in FY2016.
Gross Margin increased slightly on 0.73 pp from 28.2% to 28.9% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 2.4%. George Weston Ltd showed small CAPEX/Revenue decline of 0.55 pp from 2.9% in 2013 to 2.4% in 2016. For the last three years the average CAPEX/Revenue was 2.4%.
Return on investment
The company operates at low ROIC (7.37%) and ROE (7.33%). ROIC increased slightly on 1.0 pp from 6.3% to 7.4% in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.0x and Debt / EBITDA is 3.4x. Net Debt / EBITDA dropped on 0.4x from 3.3x to 3.0x in 2016. Debt decreased on 2.7% while cash surged on 10.4%.
Management team
The company's CEO is Galen G Weston. Galen G Weston has 1 year tenure at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide George Weston Ltd benchmarking against other companies in Consumer, Non-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 |
|---|
| Concordia Healthcare Corp ($CXR) | | | 159.5% | 275.7% | 107.0% |
| Heritage Global Inc ($HGP) | | -37.0% | 76.2% | 11.2% | 80.8% |
| EnerCare Inc ($ECI) | | 8.6% | 21.1% | 55.7% | 76.6% |
| CRH Medical Corp ($CRH) | | 12.5% | 56.0% | 284.2% | 70.2% |
| Nuvo Research Inc ($NRI) | | -25.3% | -29.1% | 57.0% | 31.9% |
| |
|---|
| Median (40 companies) | | 9.1% | 13.7% | 15.6% | 12.8% |
|---|
| George Weston Ltd ($WN) | | 2.6% | 30.8% | 6.8% | 2.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | | 99.5% | 98.3% | 92.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 88.7% | 88.4% | 88.0% | 89.1% | 88.3% |
| Information Services Corp ($ISV) | 77.5% | 80.4% | 80.9% | 87.6% | 85.1% |
| Biosyent Inc ($RX) | 79.3% | 79.2% | 78.1% | 78.7% | |
| Concordia Healthcare Corp ($CXR) | | 79.4% | 86.0% | 76.1% | 72.9% |
| |
|---|
| Median (34 companies) | 35.4% | 39.2% | 35.8% | 36.1% | 33.2% |
|---|
| George Weston Ltd ($WN) | 24.6% | 24.7% | 25.5% | 28.2% | 28.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CRH Medical Corp ($CRH) | 21.0% | 24.5% | 29.1% | 44.1% | |
| Valeant Pharmaceuticals International Inc ($VRX) | 30.6% | 27.8% | 45.6% | 39.8% | 23.8% |
| Concordia Healthcare Corp ($CXR) | | 43.7% | 37.0% | 39.8% | -92.8% |
| Ritchie Bros Auctioneers Inc ($RBA) | 36.8% | 36.3% | 36.4% | 39.7% | 31.4% |
| EnerCare Inc ($ECI) | 52.8% | 51.0% | 45.5% | 39.3% | 26.6% |
| |
|---|
| Median (43 companies) | 9.9% | 12.8% | 14.1% | 12.7% | 10.7% |
|---|
| George Weston Ltd ($WN) | 6.8% | 7.5% | 5.7% | 7.7% | 8.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| ProMetic Life Sciences Inc ($PLI) | 2.1% | 33.6% | 34.6% | 23.3% | |
| EnerCare Inc ($ECI) | 25.7% | 26.5% | 23.6% | 20.7% | 15.5% |
| Black Diamond Group Ltd ($BDI) | 61.9% | 27.5% | 31.0% | 17.6% | |
| easyhome Ltd ($EH) | 32.2% | 25.6% | 21.6% | 16.9% | 12.7% |
| K-Bro Linen Inc ($KBL) | 10.0% | 19.0% | 11.4% | 16.6% | |
| |
|---|
| Median (42 companies) | 3.1% | 2.7% | 2.4% | 2.3% | 2.0% |
|---|
| George Weston Ltd ($WN) | 3.4% | 2.9% | 2.2% | 2.7% | 2.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Information Services Corp ($ISV) | 71.8% | 72.8% | 58.9% | 38.1% | 27.6% |
| Colliers International Group Inc ($CIG) | 10.5% | 11.2% | 15.2% | 10.9% | 26.1% |
| Nuvo Research Inc ($NRI) | -11.6% | -17.4% | -37.9% | 12.9% | 20.8% |
| International Road Dynamics Inc ($IRD) | 0.9% | 6.7% | 4.4% | 10.6% | 16.5% |
| Premium Brands Holdings Corp ($PBH) | 10.3% | 9.9% | 6.9% | 12.6% | 15.3% |
| |
|---|
| Median (43 companies) | 8.7% | 7.5% | 8.5% | 7.5% | 8.4% |
|---|
| George Weston Ltd ($WN) | 8.8% | 9.2% | 4.0% | 6.3% | 7.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Concordia Healthcare Corp ($CXR) | | -1.3x | 5.6x | 20.2x | |
| SunOpta Inc ($SOY) | 2.9x | 3.5x | 1.3x | 16.9x | 140.8x |
| Centric Health Corp ($CHH) | 5.6x | 10.2x | 11.2x | 15.6x | |
| Sienna Senior Living Inc ($SIA) | 9.5x | 11.8x | 9.2x | 9.1x | 9.1x |
| Valeant Pharmaceuticals International Inc ($VRX) | 9.5x | 10.4x | 4.0x | 7.3x | 12.7x |
| |
|---|
| Median (37 companies) | 2.8x | 2.2x | 3.3x | 2.3x | 2.7x |
|---|
| George Weston Ltd ($WN) | 3.0x | 2.8x | 5.0x | 3.3x | 3.0x |
