Accsys Technologies reports 14.5% revenue growth in FY2016 and 7.4 pp EBITDA Margin growth from -2.8% to 4.6%

15 Jun 2016 • About Accsys Technologies ($AXS) • By InTwits

Accsys Technologies reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Accsys Technologies doesn't have a profitable business model yet: FY2016 ROIC is -0.6%
EBITDA Margin is expanding: 4.6% in FY2016 vs. -2.8% in FY2015 vs. -53.3% in FY2012
Accsys Technologies motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -11.8% for the sames years0
Accsys Technologies has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's in pair with industry average of 24.6%.
CAPEX is quite volatile: 2.6 in FY2016, 0.91 in FY2015, 0.57 in FY2014, 0.29 in FY2013, 1.1 in FY2012
The company has unprofitable business model: ROIC is at -0.6%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Accsys Technologies ($AXS) key annual financial indicators

mln. €	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	15.002	18.822	33.512	46.077	52.769	14.5%
Gross Profit	-0.048	3.348	7.759	12.235	18.172	48.5%
SG&A				9.910	10.371	4.7%
EBITDA	-8.002	-7.879	-4.838	-1.275	2.431	-290.7%
Net Income	-14.376	-11.023	-8.889	-8.260	-0.868	-89.5%
Balance Sheet
Cash	24.574	20.467	15.185	10.786	8.186	-24.1%
Short Term Debt	0.264	0.264	0.264	0.264	0.354	34.1%
Long Term Debt	1.960	1.924	1.871	1.799	1.947	8.2%
Cash flow
Capex	1.065	0.293	0.572	0.907	2.565	182.8%
Ratios
Revenue growth	9.5%	25.5%	78.0%	37.5%	14.5%
EBITDA growth	-28.7%	-1.5%	-38.6%	-73.6%	-290.7%
Gross Margin	-0.3%	17.8%	23.2%	26.6%	34.4%	7.9%
EBITDA Margin	-53.3%	-41.9%	-14.4%	-2.8%	4.6%	7.4%
Net Income Margin	-95.8%	-58.6%	-26.5%	-17.9%	-1.6%	16.3%
SG&A, % of revenue				21.5%	19.7%	-1.9%
CAPEX, % of revenue	7.1%	1.6%	1.7%	2.0%	4.9%	2.9%
ROIC	-15.0%	-17.0%	-13.5%	-8.0%	-0.6%	7.5%
ROE	-21.0%	-18.8%	-17.2%	-18.6%	-2.1%	16.5%
Net Debt/EBITDA					-2.4x	-2.4x

Revenue and profitability

The company's Revenue jumped on 14.5% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.6 pp from 20.8% to 27.3% in FY2016.

Gross Margin increased on 7.9 pp from 26.6% to 34.4% in FY2016. SG&A as a % of Revenue decreased slightly on 1.9 pp from 21.5% to 19.7% in FY2016.

Net Income marign surged on 16.3 pp from -17.9% to -1.6% in FY2016.

Capital expenditures (CAPEX) and working capital investments

Accsys Technologies's CAPEX/Revenue was 4.9% in FY2016. Accsys Technologies showed CAPEX/Revenue growth of 3.3 pp from 1.6% in FY2013 to 4.9% in FY2016. It's average level of CAPEX/Revenue for the last three years was 2.8%.Accsys Technologies has spent a lot to CAPEX (106% of EBITDA) to secure its growth.

Return on investment

The company operates at negative ROIC (-0.55%) and ROE (-2.09%). ROIC increased on 7.5 pp from -8.0% to -0.55% in FY2016. ROE jumped on 16.5 pp from -18.6% to -2.1% in FY2016.

Leverage (Debt)

Company's Net Debt / EBITDA is -2.4x and Debt / EBITDA is 0.9x. Net Debt / EBITDA dropped2.4x from to -2.4x in FY2016. Debt jumped on 11.5% in FY2016 while cash dropped on 24.1% in FY2016.

Appendix 1: Peers in Construction & Materials

Below you can find Accsys Technologies benchmarking vs. other companies in Construction & Materials 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
Kingspan Group ($KGP)	5.3%	9.1%	6.4%	46.7%
Billington Hldgs ($BILN)	-34.0%	8.4%	14.5%	25.8%
Crh ($CRH)		-0.3%	4.9%	25.0%	14.7%
Clarke(T.) ($CTO)	5.5%	12.0%	-4.2%	16.6%
Titon Hldgs ($TON)	-9.0%	8.2%	22.3%	15.6%
Median (25 companies)	2.6%	5.5%	8.8%	1.6%	5.0%
Accsys Technologies ($AXS)		25.5%	78.0%	37.5%	14.5%

Top companies by Gross margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Inch Kenneth Kajang Rubber ($IKK)	46.5%	24.5%	21.7%	51.7%
Swp Group ($SWP)	43.0%	48.1%	39.2%	49.7%
Heath(Samuel)& Sons ($HSM)	49.5%	47.3%	48.6%	47.6%
James Halstead ($JHD)	41.2%	41.6%	41.0%	41.7%	42.4%
Michelmersh Brick Hldgs ($MBH)	35.3%	28.4%	31.1%	38.2%
Median (23 companies)	25.4%	25.2%	27.0%	29.3%	33.5%
Accsys Technologies ($AXS)	-0.3%	17.8%	23.2%	26.6%	34.4%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Lucky Cement Ltd ($LKCS)	31.5%	26.8%	24.4%	26.5%
Steppe Cement ($STCM)	20.8%	23.2%	14.3%	24.7%
James Halstead ($JHD)	20.2%	19.8%	20.1%	20.9%	21.6%
Michelmersh Brick Hldgs ($MBH)	10.6%	7.9%	14.1%	20.3%
LSR Group OJSC ($LSRG)	20.2%	19.5%	22.9%	19.3%
Median (25 companies)	8.7%	7.4%	9.7%	9.7%	12.2%
Accsys Technologies ($AXS)	-53.3%	-41.9%	-14.4%	-2.8%	4.6%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Inch Kenneth Kajang Rubber ($IKK)	74.2%	5.4%	12.8%	54.9%
Lucky Cement Ltd ($LKCS)	3.2%	5.2%	6.9%	12.0%
Billington Hldgs ($BILN)	1.0%	1.1%	2.9%	10.8%
Low & Bonar ($BD46)	3.5%	2.8%	4.6%	9.1%	4.7%
Superglass Hldgs ($SPGH)	12.9%	14.2%	3.4%	7.9%
Median (25 companies)	2.1%	2.5%	2.6%	2.3%	2.6%
Accsys Technologies ($AXS)	7.1%	1.6%	1.7%	2.0%	4.9%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
James Halstead ($JHD)	49.3%	46.2%	46.7%	45.3%	47.1%
Alumasc Group ($ALU)	6.5%	17.5%	22.6%	36.0%
Heath(Samuel)& Sons ($HSM)	9.7%	8.7%	19.7%	32.0%
Aukett Swanke Group ($AUK)	2.7%	11.4%	27.3%	31.6%
Lucky Cement Ltd ($LKCS)	23.8%	22.9%	20.3%	20.0%
Median (25 companies)	4.8%	7.5%	7.4%	8.0%	8.7%
Accsys Technologies ($AXS)	-15.0%	-17.0%	-13.5%	-8.0%	-0.6%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Mountfield Group ($MOGP)	26.3x	4.8x	52.0x	18.8x
Asia Cement Corp ($ASCD)	7.8x	6.9x	6.8x	8.6x
Crh ($CRH)	2.0x	3.6x	1.6x	3.1x	1.7x
Low & Bonar ($BD46)	2.7x	2.1x	2.1x	2.4x	2.1x
Saint-Gobain(Compagnie De) ($COD)	2.1x	2.0x	2.1x	1.4x
Median (22 companies)	1.6x	0.7x	0.5x	-0.1x	1.9x

Accsys Technologies stock price chart

Accsys Technologies financials

mln.	FY2010	FY2011	FY2012

Revenue	16.723	13.700	15.002
EBITDA	-14.821	-11.224	-8.002
Net income	-52.139	-14.404	-14.376
CAPEX	2.029	1.073	1.065
Debt	0.000	0.000	2.224
Cash	18.258	27.576	24.574

About Accsys Technologies

Accsys Technologies PLC, together with its subsidiaries, produces and sells Accoya solid wood. The company offers Accoya wood for use in external applications, including doors, windows, cladding, decking, shutters, louvers, civil works, landscaping, outdoor furniture, and others; Tricoya acetylated wood elements, including chips, fibres, and particles, which are used in facade cladding/siding and other secondary exterior applications, window components, door components and door skins, and wet interiors. It also develops, commercializes, and licenses proprietary technologies for the manufacture and sale of Accoya wood and Tricoya wood elements, and related acetylation technologies. In addition, the company provides sales, marketing, and technical services; and sells acetic acid, as well as offers engineering services to licensees. It has operations primarily in the United Kingdom, Ireland, Benelux, and rest of Europe; the Americas; and the Asia-Pacific. The company was founded in 2005 and is headquartered in Windsor, the United Kingdom.