SNC-Lavalin Group Inc reports 33.4% EBITDA decline and 1.8 pp EBITDA Margin decline from 7.1% to 5.4%
02.03.2017 • About SNC-Lavalin Group Inc (
$SNC) • By InTwits
SNC-Lavalin Group Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 5.4% in 2016, 7.1% in 2015, 24.8% in 2014, 5.4% in 2013, 8.2% in 2012
- SNC-Lavalin Group Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.8%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 151 in 2016, 116 in 2015, 1,593 in 2014, 1,601 in 2013, 945 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
SNC-Lavalin Group Inc ($SNC) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 8,091 | 7,913 | 8,239 | 9,587 | 8,471 | -11.6% |
| Gross Profit | 1,355 | 1,116 | 1,341 | 1,433 | 1,206 | -15.8% |
| SG&A | 855 | 837 | 841 | 856 | 724 | -15.4% |
| EBITDA | 660 | 430 | 2,045 | 684 | 455 | -33.4% |
| Net Income | 306 | 36 | 1,333 | 404 | 256 | -36.8% |
Balance Sheet
|
|---|
| Cash | 1,175 | 1,109 | 1,702 | 1,582 | 1,055 | -33.3% |
| Short Term Debt | 485 | 277 | 8 | 8 | 21 | 156.2% |
| Long Term Debt | 2,349 | 3,886 | 880 | 875 | 822 | -6.1% |
Cash flow
|
|---|
| Capex | 945 | 1,601 | 1,593 | 116 | 151 | 30.5% |
Ratios
|
|---|
| Revenue growth | 12.2% | -2.2% | 4.1% | 16.4% | -11.6% | |
| EBITDA growth | -10.3% | -34.9% | 375.8% | -66.5% | -33.4% | |
| Gross Margin | 16.7% | 14.1% | 16.3% | 14.9% | 14.2% | -0.7% |
| EBITDA Margin | 8.2% | 5.4% | 24.8% | 7.1% | 5.4% | -1.8% |
| Net Income Margin | 3.8% | 0.5% | 16.2% | 4.2% | 3.0% | -1.2% |
| SG&A, % of revenue | 10.6% | 10.6% | 10.2% | 8.9% | 8.5% | -0.4% |
| CAPEX, % of revenue | 11.7% | 20.2% | 19.3% | 1.2% | 1.8% | 0.6% |
| ROIC | 10.7% | 4.0% | 35.2% | 11.4% | 6.5% | -4.9% |
| ROE | 15.5% | 1.7% | 49.8% | 11.3% | 6.6% | -4.7% |
| Net Debt/EBITDA | 2.5x | 7.1x | -0.4x | -1.0x | -0.5x | 0.6x |
SNC-Lavalin Group Inc ($SNC) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,988 | 2,103 | 2,169 | 2,211 | -11.9% | -6.5% | -10.9% | -16.4% |
| EBITDA | 188 | 152 | 80 | 35 | 22.2% | 81.5% | -76.5% | -72.4% |
| Net Income | 122 | 89 | 43 | 2 | 17.0% | 233.9% | -80.7% | -96.7% |
Balance Sheet
|
|---|
| Cash | 1,388 | 1,065 | 896 | 1,055 | 26.5% | 13.9% | -38.5% | -33.3% |
| Short Term Debt | 14 | 13 | 7 | 21 | -30.5% | -94.7% | -92.9% | 156.2% |
| Long Term Debt | 871 | 872 | 821 | 822 | 0.7% | 0.9% | -5.0% | -6.1% |
Ratios
|
|---|
| Gross Margin | 14.7% | 16.2% | 9.8% | 16.3% | -0.3% | 2.8% | -6.0% | 0.9% |
| EBITDA Margin | 9.5% | 7.2% | 3.7% | 1.6% | 2.6% | 3.5% | -10.3% | -3.2% |
| Net Income Margin | 6.1% | 4.2% | 2.0% | 0.1% | 1.5% | 3.0% | -7.2% | -1.8% |
Revenue and profitability
The company's Revenue dropped on 11.6%. Revenue decline showed acceleration in 16Q4 - it was 16.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.8 pp from 7.1% to 5.4% in 2016.
Gross Margin decreased slightly on 0.71 pp from 14.9% to 14.2% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign decreased slightly on 1.2 pp from 4.2% to 3.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 SNC-Lavalin Group Inc had CAPEX/Revenue of 1.8%. SNC-Lavalin Group Inc's CAPEX/Revenue dropped on 18.5 pp from 20.2% in 2013 to 1.8% in 2016. Average CAPEX/Revenue for the last three years was 7.4%.
Return on investment
The company operates at low ROIC (6.50%) and ROE (6.60%). ROIC decreased on 4.9 pp from 11.4% to 6.5% in 2016. ROE decreased on 4.7 pp from 11.3% to 6.6% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.5x and Debt / EBITDA is 1.9x. Net Debt / EBITDA jumped on 0.6x from -1.0x to -0.5x in 2016. Debt decreased on 4.6% while cash dropped on 33.3%.
Management team
SNC-Lavalin Group Inc's CEO is Neil A Bruce. Neil A Bruce is a founder and has 3 years tenure at the company. SNC-Lavalin Group Inc's CFO Sylvain Girard has spent 2 years at the company.
Appendix 1: Peers in Industrial
Below we provide SNC-Lavalin Group 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) | | 5.3% | 10.4% | 7.7% | 3.2% |
|---|
| SNC-Lavalin Group Inc ($SNC) | | -2.2% | 4.1% | 16.4% | -11.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($PUR) | 77.9% | 78.0% | 77.5% | 75.6% | |
| WSP Global Inc ($WSP) | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% |
| Avigilon Corp ($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% |
| |
|---|
| Median (49 companies) | 23.9% | 24.0% | 21.9% | 21.9% | 22.9% |
|---|
| SNC-Lavalin Group Inc ($SNC) | 16.7% | 14.1% | 16.3% | 14.9% | 14.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($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% | 8.0% | 9.5% | 11.1% |
|---|
| SNC-Lavalin Group Inc ($SNC) | 8.2% | 5.4% | 24.8% | 7.1% | 5.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($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% | 3.6% | 4.3% | 3.9% | 4.8% |
|---|
| SNC-Lavalin Group Inc ($SNC) | 11.7% | 20.2% | 19.3% | 1.2% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($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% | 11.0% | 8.3% | 9.7% |
|---|
| SNC-Lavalin Group Inc ($SNC) | 10.7% | 4.0% | 35.2% | 11.4% | 6.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($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 | 1.5x | 1.3x | 1.0x | 2.1x |
|---|
| SNC-Lavalin Group Inc ($SNC) | 2.5x | 7.1x | -0.4x | -1.0x | -0.5x |
