Norbord Inc Net Debt / EBITDA surged on 0.8x from 5.7x to 6.5x in 2015 and Debt increased on 3.6%
28.01.2016 • About Norbord Inc (
$NBD) • By InTwits
Norbord Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 7.8% in 2015, 7.2% in 2014, 21.4% in 2013, 16.4% in 2012, 4.7% in 2011
- Norbord Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 59 in 2015, 107 in 2014, 79 in 2013, 22 in 2012, 23 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.2%
- It operates with high leverage: Net Debt/EBITDA is 6.5x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Norbord Inc ($NBD) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 965 | 1,149 | 1,343 | 1,601 | 1,509 | -5.7% |
| Gross Profit | | 204 | 301 | 129 | 133 | 3.1% |
| SG&A | | 16 | 14 | 14 | 16 | 14.3% |
| EBITDA | 45 | 188 | 287 | 115 | 117 | 1.7% |
| Net Income | -11 | 71 | 149 | -39 | -56 | 43.6% |
Balance Sheet
|
|---|
| Cash | 83 | 128 | 193 | 92 | 9 | -90.2% |
| Short Term Debt | 242 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 265 | 433 | 433 | 748 | 775 | 3.6% |
Cash flow
|
|---|
| Capex | 23 | 22 | 79 | 107 | 59 | -44.9% |
Ratios
|
|---|
| Revenue growth | 0.3% | 19.1% | 16.9% | 19.2% | -5.7% | |
| EBITDA growth | -57.9% | 317.8% | 52.7% | -59.9% | 1.7% | |
| Gross Margin | | 17.8% | 22.4% | 8.1% | 8.8% | 0.8% |
| EBITDA Margin | 4.7% | 16.4% | 21.4% | 7.2% | 7.8% | 0.6% |
| Net Income Margin | -1.1% | 6.2% | 11.1% | -2.4% | -3.7% | -1.3% |
| SG&A, % of revenue | | 1.4% | 1.0% | 0.9% | 1.1% | 0.2% |
| CAPEX, % of revenue | 2.4% | 1.9% | 5.9% | 6.7% | 3.9% | -2.8% |
| ROIC | -0.7% | 15.2% | 24.0% | 2.4% | 2.2% | -0.2% |
| ROE | -3.5% | 20.7% | 34.6% | -6.9% | -9.5% | -2.6% |
| Net Debt/EBITDA | 9.4x | 1.6x | 0.8x | 5.7x | 6.5x | 0.8x |
Revenue and profitability
Norbord Inc's Revenue decreased on 5.7% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.57 pp from 7.2% to 7.8% in 2015.
Gross Margin increased slightly on 0.76 pp from 8.1% to 8.8% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased slightly on 1.3 pp from -2.4% to -3.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 3.9%. CAPEX/Revenue increased slightly on 2.0 pp from 1.9% in 2012 to 3.9% in 2015. For the last three years the average CAPEX/Revenue was 5.5%.The company invested a big chunk of EBITDA (50.4%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (2.17%) and negative ROE (-9.51%). ROIC showed almost no change in 2015. ROE decreased on 2.6 pp from -6.9% to -9.5% in 2015.
Leverage (Debt)
Debt level is 6.5x Net Debt / EBITDA and 6.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.8x from 5.7x to 6.5x in 2015. Debt increased on 3.6% in 2015 while cash dropped on 90.2% in 2015.
Management team
Norbord Inc's CEO is Peter Cornelius Wijnbergen. Peter Cornelius Wijnbergen is a founder and has 4 years tenure at the company. Robin E Lampard is a Norbord Inc's CFO. Robin E Lampard has spent 10 years at the company.
Appendix 1: Peers in Industrial
Below you can find Norbord Inc benchmarking vs. other companies in Industrial 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Electrovaya Inc ($EFL) | | -4.0% | -71.2% | 160.5% | 123.8% |
| Enterprise Group Inc ($E) | 14.5% | 3.5% | 88.3% | 128.5% | |
| Carmanah Technologies Corp ($CMH) | 5.8% | -26.4% | -2.0% | 68.8% | |
| Exco Technologies Ltd ($XTC) | | 19.7% | 0.9% | 50.5% | 35.3% |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| |
|---|
| Median (92 companies) | 13.5% | 10.4% | 4.9% | 9.1% | 16.2% |
|---|
| Norbord Inc ($NBD) | | 19.1% | 16.9% | 19.2% | -5.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | |
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | 69.2% |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | 58.1% |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (88 companies) | 23.3% | 23.4% | 23.4% | 23.1% | 26.1% |
|---|
| Norbord Inc ($NBD) | | 17.8% | 22.4% | 8.1% | 8.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | 50.9% |
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | 48.9% |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | 39.0% |
| Questor Technology Inc ($QST) | 25.1% | 25.7% | 34.9% | 34.1% | |
| Progressive Waste Solutions Ltd ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | |
| |
|---|
| Median (85 companies) | 8.3% | 9.2% | 8.3% | 7.7% | 11.5% |
|---|
| Norbord Inc ($NBD) | 4.7% | 16.4% | 21.4% | 7.2% | 7.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | |
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | |
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | |
| ENTREC Corp ($ENT) | | 35.0% | 26.7% | 29.5% | |
| Horizon North Logistics Inc ($HNL) | 25.1% | 26.5% | 16.3% | 24.1% | |
| |
|---|
| Median (92 companies) | 3.0% | 3.1% | 3.5% | 3.1% | 3.0% |
|---|
| Norbord Inc ($NBD) | 2.4% | 1.9% | 5.9% | 6.7% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | 51.0% |
| Photon Control Inc ($PHO) | 10.1% | 21.0% | 44.4% | 38.0% | |
| SNC-Lavalin Group Inc ($SNC) | 14.6% | 10.7% | 4.0% | 35.2% | |
| Alarmforce Industries Inc ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | 19.0% |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | 26.3% |
| |
|---|
| Median (93 companies) | 9.1% | 9.3% | 8.5% | 9.1% | 12.0% |
|---|
| Norbord Inc ($NBD) | -0.7% | 15.2% | 24.0% | 2.4% | 2.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sigma Industries Inc ($SSG) | | 4.4x | 11.3x | 225.9x | 2.9x |
| H2O Innovation Inc ($HEO) | | | 4.2x | 73.2x | 1.6x |
| Grand Power Logistics Group Inc ($GPW) | | 47.8x | | 53.1x | |
| Cargojet Inc ($CJT.A) | 1.8x | 1.5x | 1.5x | 31.5x | |
| IBI Group Inc ($IBG) | 4.2x | 6.5x | | 8.3x | |
| |
|---|
| Median (72 companies) | 1.1x | 1.5x | 1.5x | 1.2x | -0.2x |
|---|
| Norbord Inc ($NBD) | 9.4x | 1.6x | 0.8x | 5.7x | 6.5x |
