Wood Group(John) EBITDA dropped on 20.0% in 2016 and Revenue dropped on 17.6%
21 Feb 2017 • About Wood Group(John) (
$WG.) • By InTwits
Wood Group(John) reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wood Group(John) is a company in decline: FY2016 revenue growth was -17.6%, 5 years revenue CAGR was -6.2%
- Wood Group(John) has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has potentially unprofitable business model: ROIC is at 2.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wood Group(John) ($WG.) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,118 | 5,753 | 6,574 | 5,001 | 4,121 | -17.6% |
| Gross Profit | 1,000 | 950 | 1,009 | 817 | 622 | -23.8% |
| SG&A | 536 | 441 | 542 | 547 | 480 | -12.3% |
| EBITDA | 464 | 509 | 620 | 289 | 231 | -20.0% |
| Net Income | 257 | 296 | 322 | 79 | 28 | -64.8% |
Balance Sheet
|
|---|
| Cash | 172 | 145 | 157 | 205 | 580 | 183.4% |
| Short Term Debt | 45 | 74 | 15 | 30 | 434 | 1,350.2% |
| Long Term Debt | 282 | 396 | 495 | 495 | 495 | 0.0% |
Cash flow
|
|---|
| Capex | 69 | 85 | 59 | 36 | 29 | -19.7% |
Ratios
|
|---|
| Revenue growth | 8.0% | -6.0% | 14.3% | -23.9% | -17.6% | |
| EBITDA growth | 98.9% | 9.7% | 21.8% | -53.3% | -20.0% | |
| Gross Margin | 16.3% | 16.5% | 15.4% | 16.3% | 15.1% | -1.2% |
| EBITDA Margin | 7.6% | 8.9% | 9.4% | 5.8% | 5.6% | -0.2% |
| Net Income Margin | 4.2% | 5.1% | 4.9% | 1.6% | 0.7% | -0.9% |
| SG&A, % of revenue | 8.8% | 7.7% | 8.2% | 10.9% | 11.6% | 0.7% |
| CAPEX, % of revenue | 1.1% | 1.5% | 0.9% | 0.7% | 0.7% | -0.0% |
| ROIC | 14.0% | 13.3% | 16.0% | 4.5% | 2.8% | -1.7% |
| ROE | 12.3% | 12.8% | 13.0% | 3.2% | 1.2% | -2.0% |
| Net Debt/EBITDA | 0.3x | 0.6x | 0.6x | 1.1x | 1.5x | 0.4x |
Revenue and profitability
The company's Revenue dropped on 17.6% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.2 pp from 28.3% to 34.5% in 2016.
Gross Margin decreased slightly on 1.2 pp from 16.3% to 15.1% in FY2016. SG&A as a % of Revenue increased slightly on 0.70 pp from 10.9% to 11.6% in FY2016.
Net Income marign decreased slightly on 0.91 pp from 1.6% to 0.67% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Wood Group(John)'s CAPEX/Revenue was 0.70% in FY2016. CAPEX/Revenue decreased slightly on 0.76 pp from 1.5% in FY2013 to 0.70% in FY2016. Average CAPEX/Revenue for the last three years was 0.77%.
Return on investment
The company operates at low ROIC (2.76%) and ROE (1.21%). ROIC decreased slightly on 1.7 pp from 4.5% to 2.8% in FY2016. ROE decreased slightly on 2.0 pp from 3.2% to 1.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.5x and Debt / EBITDA is 4.0x. Net Debt / EBITDA surged on 0.4x from 1.1x to 1.5x in FY2016. Debt surged on 76.9% in FY2016 while cash surged on 183% in FY2016.
Appendix 1: Peers in Oil Equipment, Services & Distribution
Below we provide Wood Group(John) benchmarking against other companies in Oil Equipment, Services & Distribution 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 |
|---|
| Greka Drilling Ltd ($GDL) | 39.0% | -49.9% | -20.0% | 22.5% | |
| Thalassa Hldgs Ltd ($THAL) | 476.9% | 118.1% | -49.2% | 21.6% | |
| Mycelx Technologies Corp ($MYX) | 96.5% | 73.9% | -36.5% | 0.1% | |
| Enteq Upstream ($NTQ) | | | 59.8% | -24.6% | -66.1% |
| Schlumberger ($SCL) | | 8.5% | 7.3% | -27.0% | -21.6% |
| |
|---|
| Median (6 companies) | 67.8% | 8.5% | -17.2% | -12.2% | -43.8% |
|---|
| Wood Group(John) ($WG.) | | -6.0% | 14.3% | -23.9% | -17.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mycelx Technologies Corp ($MYX) | 53.3% | 56.9% | 52.3% | 53.3% | |
| Thalassa Hldgs Ltd ($THAL) | 35.3% | 30.4% | 42.6% | 50.1% | |
| Enteq Upstream ($NTQ) | | 42.8% | 40.0% | 37.3% | 65.0% |
| Eurasia Drilling Co Ltd ($EDCL) | 33.5% | 24.6% | 24.3% | 22.3% | |
| Schlumberger ($SCL) | 21.2% | 21.9% | 23.0% | 20.2% | 13.3% |
| |
|---|
| Median (6 companies) | 33.5% | 29.4% | 32.9% | 29.8% | 39.2% |
|---|
| Wood Group(John) ($WG.) | 16.3% | 16.5% | 15.4% | 16.3% | 15.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Eurasia Drilling Co Ltd ($EDCL) | 24.6% | 25.6% | 28.0% | 21.7% | |
| Schlumberger ($SCL) | 25.5% | 28.3% | 24.3% | 19.9% | 9.2% |
| Greka Drilling Ltd ($GDL) | 22.5% | 17.8% | 7.3% | 9.3% | |
| Enteq Upstream ($NTQ) | | 35.8% | 33.4% | -6.1% | -54.1% |
| Thalassa Hldgs Ltd ($THAL) | 13.2% | 16.1% | 4.3% | -9.2% | |
| |
|---|
| Median (6 companies) | 22.5% | 21.7% | 15.8% | 1.6% | -22.5% |
|---|
| Wood Group(John) ($WG.) | 7.6% | 8.9% | 9.4% | 5.8% | 5.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enteq Upstream ($NTQ) | | 2.1% | 6.5% | 12.4% | 1.0% |
| Eurasia Drilling Co Ltd ($EDCL) | 19.0% | 15.9% | 17.8% | 12.3% | |
| Schlumberger ($SCL) | 11.2% | 8.7% | 8.2% | 6.8% | 7.4% |
| Thalassa Hldgs Ltd ($THAL) | 10.0% | 3.1% | 63.9% | 6.6% | |
| Mycelx Technologies Corp ($MYX) | 25.3% | 35.7% | 22.3% | 5.9% | |
| |
|---|
| Median (6 companies) | 19.0% | 5.9% | 13.0% | 6.7% | 4.2% |
|---|
| Wood Group(John) ($WG.) | 1.1% | 1.5% | 0.9% | 0.7% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Eurasia Drilling Co Ltd ($EDCL) | 23.8% | 22.8% | 20.9% | 9.0% | |
| Schlumberger ($SCL) | 15.7% | 17.3% | 14.3% | 5.4% | -2.6% |
| Greka Drilling Ltd ($GDL) | 5.2% | -0.3% | -2.9% | -3.7% | |
| Mycelx Technologies Corp ($MYX) | -9.4% | 7.3% | -19.3% | -11.0% | |
| Thalassa Hldgs Ltd ($THAL) | 13.4% | 13.8% | -2.4% | -12.0% | |
| |
|---|
| Median (6 companies) | 13.4% | 10.5% | -0.4% | -7.4% | -10.0% |
|---|
| Wood Group(John) ($WG.) | 14.0% | 13.3% | 16.0% | 4.5% | 2.8% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Eurasia Drilling Co Ltd ($EDCL) | 0.5x | 0.3x | 0.8x | 2.8x | |
| Schlumberger ($SCL) | 0.9x | 0.8x | 0.9x | 2.3x | 6.5x |
| Greka Drilling Ltd ($GDL) | 0.6x | 1.9x | 2.2x | 1.2x | |
| |
|---|
| Median (3 companies) | 0.6x | 0.5x | 0.8x | 2.3x | 6.5x |
|---|
| Wood Group(John) ($WG.) | 0.3x | 0.6x | 0.6x | 1.1x | 1.5x |
