AutoCanada Inc Net Debt / EBITDA surged on 5.7x from 8.0x to 13.7x in 2016 and Debt jumped on 10.5%
16.03.2017 • About AutoCanada Inc (
$ACQ) • By InTwits
AutoCanada Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- AutoCanada Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 63.7 in 2016, 74.6 in 2015, 23.4 in 2014, 67.1 in 2013, 16.1 in 2012
- The company has potentially unprofitable business model: ROIC is at 2.9%
- It operates with high leverage: Net Debt/EBITDA is 13.7x while industry average is 2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
AutoCanada Inc ($ACQ) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,102 | 1,409 | 2,215 | 2,904 | 2,892 | -0.4% |
| Gross Profit | 190 | 246 | 373 | 488 | 486 | -0.3% |
| EBITDA | 47 | 67 | 107 | 98 | 61 | -38.0% |
| Net Income | 24 | 38 | 53 | 23 | 3 | -88.6% |
Balance Sheet
|
|---|
| Cash | 34 | 35 | 72 | 62 | 103 | 65.8% |
| Short Term Debt | 208 | 268 | 535 | 561 | 605 | 7.8% |
| Long Term Debt | 24 | 84 | 223 | 286 | 330 | 15.6% |
Cash flow
|
|---|
| Capex | 16 | 67 | 23 | 75 | 64 | -14.6% |
Ratios
|
|---|
| Revenue growth | 9.2% | 27.9% | 57.2% | 31.1% | -0.4% | |
| EBITDA growth | -25.4% | 43.8% | 59.4% | -8.1% | -38.0% | |
| Gross Margin | 17.3% | 17.5% | 16.8% | 16.8% | 16.8% | 0.0% |
| EBITDA Margin | 4.2% | 4.8% | 4.8% | 3.4% | 2.1% | -1.3% |
| Net Income Margin | 2.2% | 2.7% | 2.4% | 0.8% | 0.1% | -0.7% |
| CAPEX, % of revenue | 1.5% | 4.8% | 1.1% | 2.6% | 2.2% | -0.4% |
| ROIC | 12.4% | 12.8% | 10.3% | 6.0% | 2.9% | -3.2% |
| ROE | 20.4% | 24.3% | 18.6% | 5.5% | 0.6% | -4.9% |
| Net Debt/EBITDA | 4.2x | 4.7x | 6.4x | 8.0x | 13.7x | 5.7x |
AutoCanada Inc ($ACQ) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 667 | 842 | 753 | 629 | 5.3% | 3.1% | -3.6% | -6.4% |
| EBITDA | 26 | 33 | -24 | 26 | 38.5% | -4.4% | -170.2% | 135.7% |
| Net Income | 7 | 14 | -33 | 14 | 46.3% | -10.3% | -379.0% | |
Balance Sheet
|
|---|
| Cash | 73 | 78 | 96 | 103 | 9.8% | -0.1% | 25.0% | 65.8% |
| Short Term Debt | 615 | 555 | 596 | 605 | -0.1% | -10.9% | 4.9% | 7.8% |
| Long Term Debt | 293 | 296 | 291 | 330 | 21.2% | 3.0% | -7.1% | 15.6% |
Ratios
|
|---|
| Gross Margin | 16.8% | 16.0% | 16.3% | 18.6% | 0.1% | 0.1% | -0.1% | 0.1% |
| EBITDA Margin | 3.8% | 4.0% | -3.2% | 4.1% | 0.9% | -0.3% | -7.5% | 2.5% |
| Net Income Margin | 1.1% | 1.7% | -4.3% | 2.2% | 0.3% | -0.3% | -5.8% | 3.3% |
Revenue and profitability
The company's Revenue showed almost no change in 2016. Revenue decline showed acceleration in 16Q4 - it was 6.4% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 3.4% to 2.1% in 2016.
Gross Margin showed almost no change in 2016.
Net Income marign decreased slightly on 0.70 pp from 0.79% to 0.090% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.2% in 2016. The company showed decline in CAPEX/Revenue of 2.6 pp from 4.8% in 2013 to 2.2% in 2016. It's average CAPEX/Revenue for the last three years was 1.9%.Battling declining revenue the company made large investments to CAPEX (105% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (2.88%) and ROE (0.58%). ROIC decreased on 3.2 pp from 6.0% to 2.9% in 2016. ROE decreased on 4.9 pp from 5.5% to 0.58% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 13.7x and Debt / EBITDA is 15.3x. Net Debt / EBITDA surged on 5.7x from 8.0x to 13.7x in 2016. Debt surged on 10.5% while cash jumped on 65.8%.
Appendix 1: Peers in Consumer, Cyclical
Below you can find AutoCanada Inc benchmarking vs. other companies in Consumer, Cyclical 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 |
|---|
| 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% | 5.5% |
|---|
| AutoCanada Inc ($ACQ) | | 27.9% | 57.2% | 31.1% | -0.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Innova Gaming Group Inc ($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% |
|---|
| AutoCanada Inc ($ACQ) | 17.3% | 17.5% | 16.8% | 16.8% | 16.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($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) | 8.6% | 10.2% | 12.4% | 11.0% | 15.4% |
|---|
| AutoCanada Inc ($ACQ) | 4.2% | 4.8% | 4.8% | 3.4% | 2.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($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) | 3.2% | 2.9% | 3.4% | 3.5% | 5.0% |
|---|
| AutoCanada Inc ($ACQ) | 1.5% | 4.8% | 1.1% | 2.6% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($TOY) | | 19.2% | 56.9% | 48.2% | 44.5% |
| Magna International Inc ($MG) | 16.3% | 18.6% | 25.2% | 21.9% | 21.2% |
| Linamar Corp ($LNR) | 12.9% | 17.0% | 21.7% | 23.7% | 19.8% |
| Sleep Country Canada Holdings Inc ($ZZZ) | | | 9.7% | 12.7% | 19.0% |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | 18.8% |
| |
|---|
| Median (41 companies) | 10.2% | 12.4% | 10.9% | 10.9% | 11.4% |
|---|
| AutoCanada Inc ($ACQ) | 12.4% | 12.8% | 10.3% | 6.0% | 2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | 8.6x |
| 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 ($PSG) | 2.6x | 3.5x | 12.2x | 6.5x | |
| Canlan Ice Sports Corp ($ICE) | 2.7x | 3.2x | 3.6x | 6.3x | |
| |
|---|
| Median (34 companies) | 1.7x | 2.5x | 2.3x | 2.4x | 1.9x |
|---|
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | 13.7x |
