International Bus Mach Corp EBITDA dropped on 15.9% in 2016 and EBITDA Margin decreased on 3.2 pp from 23.1% to 19.8%
19 Jan 2017 • About International Bus Mach Corp (
$IBM) • By InTwits
International Bus Mach Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- International Bus Mach Corp is a company in decline: 2016 revenue growth was -2.2%, 5 years revenue CAGR was -5.7%
- EBITDA Margin is declining: 19.8% in 2016 vs. 23.1% in 2015 vs. 24.0% in 2012
- International Bus Mach Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 2.0%.
- CAPEX is quite volatile: 7,270 in FY2016, 9,857 in FY2015, 5,603 in FY2014, 2,893 in FY2013, 1,051 in FY2012
- The company has highly profitable business model: ROIC is at 18.7%
- It operates with high leverage: Net Debt/EBITDA is 2.2x while industry average is 0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
International Bus Mach Corp ($IBM) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 104,507 | 98,369 | 92,793 | 81,741 | 79,919 | -2.2% |
| Gross Profit | 50,298 | 48,686 | 46,407 | 40,684 | 38,294 | -5.9% |
| SG&A | 23,553 | 23,451 | 23,180 | 20,430 | 21,069 | 3.1% |
| EBITDA | 25,119 | 24,170 | 22,282 | 18,862 | 15,855 | -15.9% |
| Net Income | 16,604 | 16,483 | 12,022 | 13,190 | 11,872 | -10.0% |
Balance Sheet
|
|---|
| Cash | 10,412 | 10,716 | 8,476 | 7,686 | 7,826 | 1.8% |
| Short Term Debt | 9,181 | 6,862 | 5,731 | 6,461 | 7,513 | 16.3% |
| Long Term Debt | 24,088 | 32,856 | 34,991 | 33,428 | 34,655 | 3.7% |
Cash flow
|
|---|
| Capex | 4,082 | 3,623 | 3,740 | 3,579 | 3,567 | -0.3% |
Ratios
|
|---|
| Revenue growth | -2.3% | -5.9% | -5.7% | -11.9% | -2.2% | |
| EBITDA growth | 0.1% | -3.8% | -7.8% | -15.3% | -15.9% | |
| Gross Margin | 48.1% | 49.5% | 50.0% | 49.8% | 47.9% | -1.9% |
| EBITDA Margin | 24.0% | 24.6% | 24.0% | 23.1% | 19.8% | -3.2% |
| Net Income Margin | 15.9% | 16.8% | 13.0% | 16.1% | 14.9% | -1.3% |
| SG&A, % of revenue | 22.5% | 23.8% | 25.0% | 25.0% | 26.4% | 1.4% |
| CAPEX, % of revenue | 3.9% | 3.7% | 4.0% | 4.4% | 4.5% | 0.1% |
| ROIC | 36.1% | 31.0% | 28.1% | 25.7% | 18.7% | -7.0% |
| ROE | 85.2% | 79.1% | 69.4% | 101.0% | 73.0% | -27.9% |
| Net Debt/EBITDA | 0.9x | 1.2x | 1.4x | 1.7x | 2.2x | 0.5x |
Revenue and profitability
International Bus Mach Corp's Revenue decreased on 2.2% in 2016. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.2 pp from 23.1% to 19.8% in 2016.
Gross Margin decreased slightly on 1.9 pp from 49.8% to 47.9% in 2016. SG&A as a % of Revenue increased slightly on 1.4 pp from 25.0% to 26.4% in 2016.
Net Income marign decreased slightly on 1.3 pp from 16.1% to 14.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.5% in 2016. CAPEX/Revenue increased slightly on 0.78 pp from 3.7% in 2013 to 4.5% in 2016. It's average CAPEX/Revenue for the last three years was 4.3%.
Return on investment
The company operates at high and attractive ROE (73.04%) while ROIC is a bit lower (18.73%). ROIC decreased on 7.0 pp from 25.7% to 18.7% in 2016. ROE dropped on 27.9 pp from 101% to 73.0% in 2016.
Leverage (Debt)
Debt level is 2.2x Net Debt / EBITDA and 2.7x Debt / EBITDA. Net Debt / EBITDA jumped on 0.5x from 1.7x to 2.2x in 2016. Debt increased on 5.7% in 2016 while cash increased slightly on 1.8% in 2016.
Valuation
The company's trades at EV/EBITDA 2.3x and P/E 0.1x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 2.9x with the industry average at 19.0x.
Appendix 1: Peers in Software & Computer Services
Below you can find International Bus Mach Corp benchmarking vs. other companies in Software & Computer Services 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 |
|---|
| Coms ($COMS) | | 46.8% | 763.3% | 110.4% | 36.1% |
| Centralnic Group ($CNIC) | 15.9% | 4.0% | 98.9% | 71.3% | |
| Proactis Holdings ($PHD) | | 7.0% | 26.2% | 69.6% | 12.5% |
| Progility ($PGY) | | | | 51.0% | 3.2% |
| Galasys ($GLS) | 14.3% | 20.9% | 311.1% | 33.0% | |
| |
|---|
| Median (44 companies) | 10.5% | 6.8% | 5.2% | 4.7% | 10.7% |
|---|
| International Bus Mach Corp ($IBM) | | -5.9% | -5.7% | -11.9% | -2.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lombard Risk Management ($LRM) | 99.0% | 98.8% | 99.2% | 98.6% | 99.3% |
| Phoenix It Group ($PNX) | 97.0% | 97.2% | 97.6% | 97.9% | |
| Wandisco ($WAND) | 91.8% | 80.3% | 80.7% | 93.2% | |
| Netcall ($NET) | 88.2% | 89.7% | 91.0% | 90.9% | 91.2% |
| Idox ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | 86.8% |
| |
|---|
| Median (37 companies) | 63.2% | 63.0% | 58.9% | 60.3% | 65.9% |
|---|
| International Bus Mach Corp ($IBM) | 48.1% | 49.5% | 50.0% | 49.8% | 47.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mail.Ru Group Ltd ($61HE) | 43.1% | 47.4% | 50.5% | 34.6% | |
| Dotdigital Group ($DOTD) | 31.4% | 39.4% | 29.2% | 32.0% | 30.4% |
| Idox ($IDOX) | 30.9% | 26.1% | 26.0% | 28.6% | 27.3% |
| Galasys ($GLS) | 44.0% | 83.6% | 32.6% | 28.5% | |
| Oxford Metrics ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | 23.1% |
| |
|---|
| Median (44 companies) | 13.8% | 13.0% | 12.0% | 12.3% | 8.2% |
|---|
| International Bus Mach Corp ($IBM) | 24.0% | 24.6% | 24.0% | 23.1% | 19.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Rapidcloud Intl ($RCI) | 1.0% | 23.1% | 11.6% | 19.6% | |
| Coms ($COMS) | 0.5% | 0.9% | 3.4% | 7.5% | 0.1% |
| Csf Group ($CSFG) | 1.5% | 4.0% | 2.4% | 7.1% | 4.9% |
| Nasstar ($NASA) | 17.9% | | 2.1% | 5.2% | |
| Unisys Corp ($USY) | 2.1% | 2.5% | 4.1% | 5.0% | |
| |
|---|
| Median (44 companies) | 1.5% | 1.5% | 1.9% | 1.1% | 1.0% |
|---|
| International Bus Mach Corp ($IBM) | 3.9% | 3.7% | 4.0% | 4.4% | 4.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Triad Group ($TRD) | 4.1% | -3.8% | 24.5% | 61.5% | 74.4% |
| Dotdigital Group ($DOTD) | 26.4% | 38.0% | 28.5% | 31.4% | 28.9% |
| Galasys ($GLS) | 58.7% | 60.9% | 40.8% | 22.2% | |
| Instem ($INS) | 20.6% | 14.7% | 10.9% | 20.4% | |
| Kalibrate Technologies ($KLBT) | 12.5% | 40.2% | 29.2% | 18.8% | 10.2% |
| |
|---|
| Median (44 companies) | 12.5% | 11.5% | 9.4% | 4.3% | 9.8% |
|---|
| International Bus Mach Corp ($IBM) | 36.1% | 31.0% | 28.1% | 25.7% | 18.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Progility ($PGY) | 2.0x | | 1.8x | 12.8x | 6.8x |
| Parity Group ($PTY) | 4.7x | | 4.9x | 5.1x | |
| Nasstar ($NASA) | -5.3x | | 0.0x | 1.9x | |
| Phoenix It Group ($PNX) | 4.3x | | | 1.9x | |
| Idox ($IDOX) | 1.3x | 1.3x | 1.0x | 1.3x | 1.2x |
| |
|---|
| Median (34 companies) | -0.5x | -0.5x | -0.3x | -0.6x | -0.9x |
|---|
| International Bus Mach Corp ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | 2.2x |
