Valeant Pharmaceuticals International Inc Net Income dropped on 133% in 2015 and EBITDA Margin decreased on 5.8 pp from 45.6% to 39.8%
15.03.2016 • About Valeant Pharmaceuticals International Inc (
$VRX) • By InTwits
Valeant Pharmaceuticals International Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Valeant Pharmaceuticals International Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 8.1%.
- CAPEX is quite volatile: 235 in 2015, 292 in 2014, 115 in 2013, 108 in 2012, 58.5 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.6%
- It operates with high leverage: Net Debt/EBITDA is 7.3x while industry average is 5.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Valeant Pharmaceuticals International Inc ($VRX) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,463 | 3,480 | 5,770 | 8,206 | 10,447 | 27.3% |
| Gross Profit | 1,737 | 2,511 | 3,864 | 5,970 | 7,862 | 31.7% |
| SG&A | 572 | 756 | 1,305 | 2,026 | 2,700 | 33.2% |
| EBITDA | 913 | 1,066 | 1,606 | 3,738 | 4,155 | 11.1% |
| Net Income | 160 | -116 | -866 | 881 | -292 | -133.1% |
Balance Sheet
|
|---|
| Cash | 164 | 916 | 600 | 323 | 597 | 85.2% |
| Short Term Debt | 111 | 480 | 205 | 1 | 823 | 91,344.4% |
| Long Term Debt | 6,540 | 10,535 | 17,163 | 15,228 | 30,265 | 98.7% |
Cash flow
|
|---|
| Capex | 59 | 108 | 115 | 292 | 235 | -19.3% |
Ratios
|
|---|
| Revenue growth | 108.5% | 41.3% | 65.8% | 42.2% | 27.3% | |
| EBITDA growth | 531.9% | 16.8% | 50.7% | 132.7% | 11.1% | |
| Gross Margin | 70.5% | 72.1% | 67.0% | 72.8% | 75.3% | 2.5% |
| EBITDA Margin | 37.0% | 30.6% | 27.8% | 45.6% | 39.8% | -5.8% |
| Net Income Margin | 6.5% | -3.3% | -15.0% | 10.7% | -2.8% | -13.5% |
| SG&A, % of revenue | 23.2% | 21.7% | 22.6% | 24.7% | 25.8% | 1.2% |
| CAPEX, % of revenue | 2.4% | 3.1% | 2.0% | 3.6% | 2.3% | -1.3% |
| ROIC | 2.8% | 0.6% | -2.0% | 8.3% | 4.6% | -3.7% |
| ROE | 3.6% | -3.0% | -19.6% | 16.9% | -5.2% | -22.2% |
| Net Debt/EBITDA | 7.1x | 9.5x | 10.4x | 4.0x | 7.3x | 3.4x |
Revenue and profitability
Valeant Pharmaceuticals International Inc's Revenue jumped on 27.3% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 5.8 pp from 45.6% to 39.8% in 2015.
Gross Margin increased on 2.5 pp from 72.8% to 75.3% in 2015. SG&A as a % of Revenue increased slightly on 1.2 pp from 24.7% to 25.8% in 2015.
Net Income marign dropped on 13.5 pp from 10.7% to -2.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.3% in 2015. CAPEX/Revenue decreased slightly on 0.84 pp from 3.1% in 2012 to 2.3% in 2015. It's average level of CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at low but positive ROIC (4.62%) and negative ROE (-5.21%). ROIC decreased on 3.7 pp from 8.3% to 4.6% in 2015. ROE dropped on 22.2 pp from 16.9% to -5.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.3x and Debt / EBITDA is 7.5x. Net Debt / EBITDA surged on 3.4x from 4.0x to 7.3x in 2015. Debt jumped on 104% in 2015 while cash surged on 85.2% in 2015.
Appendix 1: Peers in Consumer, Non-cyclical
Below you can find Valeant Pharmaceuticals International Inc benchmarking vs. other companies in Consumer, Non-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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| GDI Integrated Facility Services Inc ($GDI) | | -38.8% | -72.9% | 218,969.1% | 18.7% |
| Cardiome Pharma Corp ($COM) | | -47.6% | 471.7% | 566.0% | -30.4% |
| Patient Home Monitoring Corp ($PHM) | | 170.2% | 1.9% | 433.0% | 238.4% |
| Family Memorials Inc ($FAM) | -13.6% | 54.7% | 22.9% | 245.3% | |
| Nobilis Health Corp ($NHC) | | 45.3% | 49.0% | 169.9% | 172.8% |
| |
|---|
| Median (86 companies) | 16.3% | 8.7% | 5.3% | 12.7% | 11.4% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | | 41.3% | 65.8% | 42.2% | 27.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nobilis Health Corp ($NHC) | | | | 99.8% | |
| Cipher Pharmaceuticals Inc ($CPH) | | | 99.5% | 98.3% | 92.7% |
| Heritage Global Inc ($HGP) | 99.5% | | | 95.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 87.9% | 88.7% | 88.4% | 88.0% | 89.1% |
| Concordia Healthcare Corp ($CXR) | | | 79.4% | 86.0% | |
| |
|---|
| Median (74 companies) | 35.4% | 36.1% | 35.9% | 35.1% | 35.7% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 70.5% | 72.1% | 67.0% | 72.8% | 75.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | -50.0% | 40.6% | 71.4% | 63.7% | 12.8% |
| Merus Labs International Inc ($MSL) | | 32.9% | 64.7% | 46.2% | 61.5% |
| EnerCare Inc ($ECI) | 59.0% | 52.8% | 51.0% | 45.5% | 39.3% |
| Information Services Corp ($ISV) | 34.1% | 39.6% | 39.6% | 37.6% | 36.1% |
| Concordia Healthcare Corp ($CXR) | | | 43.7% | 37.0% | |
| |
|---|
| Median (85 companies) | 7.5% | 7.4% | 8.7% | 10.6% | 10.8% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 37.0% | 30.6% | 27.8% | 45.6% | 39.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Neptune Technologies & Bioressources Inc ($NTB) | 6.0% | 4.7% | 73.6% | 84.6% | 119.0% |
| CanaDream Corp ($CDN) | 68.6% | 43.3% | 38.1% | 70.4% | 63.4% |
| Ceapro Inc ($CZO) | 2.2% | 3.9% | 35.3% | 52.0% | |
| Feronia Inc/Canada ($FRN) | 129.0% | 191.4% | 117.4% | 42.4% | |
| Microbix Biosystems Inc ($MBX) | 1.0% | 1.2% | 3.0% | 40.3% | 38.7% |
| |
|---|
| Median (86 companies) | 2.3% | 2.6% | 2.4% | 2.5% | 2.3% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 2.4% | 3.1% | 2.0% | 3.6% | 2.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biosyent Inc ($RX) | 45.5% | 71.7% | 62.4% | 62.9% | 48.2% |
| Information Services Corp ($ISV) | 56.0% | 71.8% | 72.8% | 58.9% | 38.1% |
| Covalon Technologies Ltd ($COV) | -49.6% | -75.8% | -30.1% | 50.6% | -12.4% |
| Cipher Pharmaceuticals Inc ($CPH) | -22.9% | 21.8% | 81.4% | 44.6% | -0.1% |
| Ceapro Inc ($CZO) | 69.9% | -33.5% | 15.5% | 43.5% | |
| |
|---|
| Median (86 companies) | 7.7% | 7.1% | 6.9% | 6.7% | 6.8% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 2.8% | 0.6% | -2.0% | 8.3% | 4.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Noble Iron Inc ($NIR) | | 25.5x | 12.9x | 227.3x | |
| Family Memorials Inc ($FAM) | | | | 15.2x | |
| Amica Mature Lifestyles Inc ($ACC) | 11.7x | 9.4x | 14.7x | 13.8x | 12.3x |
| Cott Corp ($BCB) | 2.6x | 2.0x | 2.2x | 13.4x | 4.9x |
| CRH Medical Corp ($CRH) | -2.3x | -3.1x | -3.5x | 12.0x | 1.3x |
| |
|---|
| Median (70 companies) | 1.8x | 2.5x | 2.2x | 2.6x | 1.6x |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 7.1x | 9.5x | 10.4x | 4.0x | 7.3x |
