Linamar Corp reports 19.6% Net Income growth and 16.3% Revenue growth
08.03.2017 • About Linamar Corp (
$LNR) • By InTwits
Linamar Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Linamar Corp is a fast growth stock: 2016 revenue growth was 16.3%, 5 year revenue CAGR was 16.0% at 2016 ROIC 19.8%
- Linamar Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's in pair with industry average of 7.8%.
- CAPEX is quite volatile: 109 in 2016, 88.1 in 2015, 39.6 in 2014, 22.3 in 2013, 16.6 in 2012
- The company has highly profitable business model: ROIC is at 19.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Linamar Corp ($LNR) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,222 | 3,595 | 4,172 | 5,162 | 6,006 | 16.3% |
| Gross Profit | 386 | 506 | 664 | 853 | 1,003 | 17.6% |
| SG&A | 166 | 183 | 218 | 266 | 325 | 22.3% |
| EBITDA | 409 | 539 | 690 | 871 | 1,030 | 18.3% |
| Net Income | 146 | 230 | 321 | 437 | 522 | 19.6% |
Balance Sheet
|
|---|
| Cash | 82 | 130 | 194 | 339 | 405 | 19.4% |
| Short Term Debt | 1 | 56 | 3 | 11 | 205 | 1,792.5% |
| Long Term Debt | 718 | 487 | 434 | 537 | 1,228 | 128.5% |
Cash flow
|
|---|
| Capex | 367 | 245 | 264 | 342 | 343 | 0.5% |
Ratios
|
|---|
| Revenue growth | 12.6% | 11.6% | 16.0% | 23.8% | 16.3% | |
| EBITDA growth | 22.3% | 31.5% | 28.1% | 26.2% | 18.3% | |
| Gross Margin | 12.0% | 14.1% | 15.9% | 16.5% | 16.7% | 0.2% |
| EBITDA Margin | 12.7% | 15.0% | 16.5% | 16.9% | 17.2% | 0.3% |
| Net Income Margin | 4.5% | 6.4% | 7.7% | 8.5% | 8.7% | 0.2% |
| SG&A, % of revenue | 5.1% | 5.1% | 5.2% | 5.2% | 5.4% | 0.3% |
| CAPEX, % of revenue | 11.4% | 6.8% | 6.3% | 6.6% | 5.7% | -0.9% |
| ROIC | 12.9% | 17.0% | 21.7% | 23.7% | 19.8% | -3.9% |
| ROE | 14.9% | 19.1% | 21.2% | 22.2% | 21.5% | -0.7% |
| Net Debt/EBITDA | 1.6x | 0.8x | 0.4x | 0.2x | 1.0x | 0.8x |
Linamar Corp ($LNR) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,518 | 1,657 | 1,456 | 1,375 | 18.8% | 21.1% | 14.3% | 10.6% |
| EBITDA | 255 | 301 | 249 | 226 | 14.2% | 29.1% | 16.4% | 12.4% |
| Net Income | 126 | 157 | 122 | 116 | 11.2% | 31.0% | 13.6% | 21.9% |
Balance Sheet
|
|---|
| Cash | 408 | 415 | 462 | 405 | 126.8% | 114.1% | 126.3% | 19.4% |
| Short Term Debt | 42 | 30 | 206 | 205 | 10.0% | -14.7% | 512.5% | 1,792.5% |
| Long Term Debt | 1,759 | 1,729 | 1,478 | 1,228 | 176.6% | 197.4% | 172.9% | 128.5% |
Ratios
|
|---|
| Gross Margin | 16.8% | 17.6% | 16.1% | 16.1% | -0.3% | 0.2% | 0.6% | 0.2% |
| EBITDA Margin | 16.8% | 18.1% | 17.1% | 16.5% | -0.7% | 1.1% | 0.3% | 0.3% |
| Net Income Margin | 8.3% | 9.5% | 8.4% | 8.4% | -0.6% | 0.7% | -0.0% | 0.8% |
Revenue and profitability
Linamar Corp's Revenue jumped on 16.3%. Revenue growth showed slow down in 16Q4 - it was 10.6% YoY. EBITDA Margin showed almost no change 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 showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Linamar Corp had CAPEX/Revenue of 5.7%. Linamar Corp's CAPEX/Revenue decreased slightly on 1.1 pp from 6.8% in 2013 to 5.7% in 2016. It's average level of CAPEX/Revenue for the last three years was 6.2%.
Return on investment
The company operates at high and attractive ROE (21.54%) while ROIC is a bit lower (19.77%). ROIC decreased on 3.9 pp from 23.7% to 19.8% in 2016. ROE decreased slightly on 0.69 pp from 22.2% to 21.5% in 2016.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and 1.4x Debt / EBITDA. Net Debt / EBITDA surged on 0.8x from 0.2x to 1.0x in 2016. Debt jumped on 161% while cash surged on 19.4%.
Management team
Linamar Corp's CEO is Linda S Hasenfratz. Linda S Hasenfratz is a founder and has 16 years tenure at the company. Linamar Corp's CFO is Dale Schneider. Dale Schneider has 7 years tenure at the company.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Linamar Corp benchmarking against other companies in Consumer, 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 |
|---|
| New Flyer Industries Inc ($NFI) | | 38.6% | 21.0% | 6.1% | 47.8% |
| Hardwoods Distribution Inc ($HWD) | | 21.3% | 22.8% | 25.4% | 38.1% |
| Spin Master Corp ($TOY) | | 21.5% | 41.0% | 22.9% | 31.3% |
| Great Canadian Gaming Corp ($GC) | | -0.3% | 9.6% | 3.7% | 22.4% |
| CanWel Building Materials Group Ltd ($CWX) | | 2.1% | 4.6% | 8.6% | 18.6% |
| |
|---|
| Median (35 companies) | | 4.7% | 6.6% | 6.1% | 4.6% |
|---|
| Linamar Corp ($LNR) | | 11.6% | 16.0% | 23.8% | 16.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Innova Gaming Group Inc ($IGG) | 89.3% | 82.4% | 85.3% | 92.9% | 88.1% |
| Second Cup Ltd/The ($SCU) | 86.6% | 85.1% | 72.7% | 81.1% | |
| New Look Vision Group Inc ($BCI) | 71.8% | 72.6% | 72.6% | 78.7% | |
| Cara Operations Ltd ($CAO) | | 79.2% | 78.9% | 78.4% | |
| Canlan Ice Sports Corp ($ICE) | 71.6% | 69.7% | 70.7% | 78.2% | |
| |
|---|
| Median (36 companies) | 38.1% | 34.2% | 33.5% | 32.6% | 36.2% |
|---|
| Linamar Corp ($LNR) | 12.0% | 14.1% | 15.9% | 16.5% | 16.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | 42.6% |
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | 34.4% |
| Restaurant Brands International Inc ($QSR) | | 51.1% | 20.8% | 33.9% | 44.4% |
| Cara Operations Ltd ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (38 companies) | 8.0% | 9.8% | 12.2% | 10.0% | 15.0% |
|---|
| Linamar Corp ($LNR) | 12.7% | 15.0% | 16.5% | 16.9% | 17.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | 9.3% |
| WestJet Airlines Ltd ($WJA) | 7.9% | 19.5% | 18.6% | 22.5% | 22.4% |
| Westshore Terminals Investment Corp ($WTE) | 25.7% | 11.5% | 6.2% | 21.2% | |
| Innova Gaming Group Inc ($IGG) | 20.6% | 26.7% | 15.9% | 15.6% | 15.1% |
| Exchange Income Corp ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | 29.7% |
| |
|---|
| Median (41 companies) | 2.7% | 2.9% | 3.3% | 3.2% | 4.9% |
|---|
| Linamar Corp ($LNR) | 11.4% | 6.8% | 6.3% | 6.6% | 5.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($TOY) | | 19.2% | 56.9% | 48.2% | 44.5% |
| Magna International Inc ($MG) | 16.3% | 18.6% | 25.2% | 21.9% | 21.2% |
| Sleep Country Canada Holdings Inc ($ZZZ) | | | 9.7% | 12.7% | 19.0% |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | 18.8% |
| Uni-Select Inc ($UNS) | 4.8% | 3.4% | 9.6% | -11.1% | 17.0% |
| |
|---|
| Median (41 companies) | 10.2% | 12.4% | 10.8% | 10.2% | 11.0% |
|---|
| Linamar Corp ($LNR) | 12.9% | 17.0% | 21.7% | 23.7% | 19.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | 8.6x |
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | 13.7x |
| Second Cup Ltd/The ($SCU) | 1.0x | 0.6x | 0.0x | 7.5x | 0.0x |
| Amaya Inc ($AYA) | 17.9x | 1.8x | 13.5x | 6.6x | 5.0x |
| Performance Sports Group Ltd ($PSG) | 2.6x | 3.5x | 12.2x | 6.5x | |
| |
|---|
| Median (34 companies) | 2.1x | 2.8x | 2.4x | 2.6x | 2.1x |
|---|
| Linamar Corp ($LNR) | 1.6x | 0.8x | 0.4x | 0.2x | 1.0x |
