Aecon Group Inc EBITDA dropped on 28.3% in 2016 while Revenue surged on 10.1%
07.03.2017 • About Aecon Group Inc (
$ARE) • By InTwits
Aecon Group Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Aecon Group Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 140 in 2016, 111 in 2015, 46.7 in 2014, 55.6 in 2013, 69.7 in 2012
- The company has business model with low profitability: ROIC is at 7.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Aecon Group Inc ($ARE) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,887 | 3,069 | 2,614 | 2,918 | 3,213 | 10.1% |
| Gross Profit | 279 | 270 | 271 | 298 | 312 | 4.8% |
| SG&A | 158 | 148 | 164 | 170 | 185 | 9.0% |
| EBITDA | 178 | 160 | 127 | 211 | 151 | -28.3% |
| Net Income | 78 | 41 | 30 | 69 | 47 | -31.9% |
Balance Sheet
|
|---|
| Cash | 63 | 241 | 139 | 283 | 232 | -18.0% |
| Short Term Debt | 72 | 241 | 174 | 56 | 59 | 5.4% |
| Long Term Debt | 399 | 372 | 271 | 266 | 251 | -5.7% |
Cash flow
|
|---|
| Capex | 51 | 46 | 28 | 30 | 33 | 9.4% |
Ratios
|
|---|
| Revenue growth | -0.3% | 6.3% | -14.8% | 11.6% | 10.1% | |
| EBITDA growth | 9.1% | -9.9% | -20.6% | 65.5% | -28.3% | |
| Gross Margin | 9.7% | 8.8% | 10.4% | 10.2% | 9.7% | -0.5% |
| EBITDA Margin | 6.2% | 5.2% | 4.9% | 7.2% | 4.7% | -2.5% |
| Net Income Margin | 2.7% | 1.3% | 1.1% | 2.4% | 1.5% | -0.9% |
| SG&A, % of revenue | 5.5% | 4.8% | 6.3% | 5.8% | 5.8% | -0.1% |
| CAPEX, % of revenue | 1.8% | 1.5% | 1.1% | 1.0% | 1.0% | -0.0% |
| ROIC | 10.4% | 8.4% | 5.3% | 12.6% | 7.6% | -5.0% |
| ROE | 15.1% | 7.2% | 4.8% | 10.0% | 6.4% | -3.6% |
| Net Debt/EBITDA | 2.3x | 2.3x | 2.4x | 0.2x | 0.5x | 0.3x |
Aecon Group Inc ($ARE) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 691 | 839 | 838 | 845 | 37.7% | 25.8% | -4.2% | -3.3% |
| EBITDA | 3 | 27 | 57 | 64 | | -26.7% | -21.1% | -37.4% |
| Net Income | -17 | 7 | 27 | 29 | | -42.7% | 7.0% | -39.0% |
Balance Sheet
|
|---|
| Cash | 214 | 188 | 202 | 232 | 126.5% | 76.1% | 48.3% | -18.0% |
| Short Term Debt | 76 | 117 | 92 | 59 | -70.6% | -53.1% | -67.9% | 5.4% |
| Long Term Debt | 263 | 257 | 255 | 251 | -1.8% | -1.9% | -2.9% | -5.7% |
Ratios
|
|---|
| Gross Margin | 6.5% | 8.3% | 11.5% | 12.0% | -0.8% | -0.4% | -0.9% | 1.1% |
| EBITDA Margin | 0.4% | 3.2% | 6.9% | 7.6% | 0.6% | -2.3% | -1.5% | -4.1% |
| Net Income Margin | -2.4% | 0.8% | 3.3% | 3.4% | 1.0% | -1.0% | 0.3% | -2.0% |
Revenue and profitability
Aecon Group Inc's Revenue surged on 10.1%. Revenue growth showed slow down in 16Q4 - it was -3.3% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.6 pp from -1.6% to 6.0% in 2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign decreased slightly on 0.90 pp from 2.4% to 1.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
Aecon Group Inc's CAPEX/Revenue was 1.0% in 2016. The company's CAPEX/Revenue showed almost no change from 2013 to 2016. Average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at low ROIC (7.60%) and ROE (6.35%). ROIC decreased on 5.0 pp from 12.6% to 7.6% in 2016. ROE decreased on 3.6 pp from 10.0% to 6.4% in 2016.
Leverage (Debt)
Debt level is 0.5x Net Debt / EBITDA and 2.1x Debt / EBITDA. Net Debt / EBITDA surged on 0.3x from 0.2x to 0.5x in 2016. Debt decreased on 3.8% while cash dropped on 18.0%.
Appendix 1: Peers in Industrial
Below you can find Aecon Group Inc 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 ($STN) | | 17.9% | 13.3% | 14.4% | 30.5% |
| Avigilon Corp ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
| |
|---|
| Median (51 companies) | | 4.9% | 10.4% | 7.7% | 2.6% |
|---|
| Aecon Group Inc ($ARE) | | 6.3% | -14.8% | 11.6% | 10.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($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% |
|---|
| Aecon Group Inc ($ARE) | 9.7% | 8.8% | 10.4% | 10.2% | 9.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($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% |
|---|
| Aecon Group Inc ($ARE) | 6.2% | 5.2% | 4.9% | 7.2% | 4.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($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% |
|---|
| Aecon Group Inc ($ARE) | 1.8% | 1.5% | 1.1% | 1.0% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($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% | 8.3% | 9.7% |
|---|
| Aecon Group Inc ($ARE) | 10.4% | 8.4% | 5.3% | 12.6% | 7.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($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 | 1.2x | 1.0x | 2.1x |
|---|
| Aecon Group Inc ($ARE) | 2.3x | 2.3x | 2.4x | 0.2x | 0.5x |
