Norbord Inc Net Income jumped on 427% in 2016 and EBITDA Margin surged on 13.4 pp from 7.8% to 21.2%
03.02.2017 • About Norbord Inc (
$NBD) • By InTwits
Norbord Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Norbord Inc is a growth stock: 2016 revenue growth was 17.0%, 5 year revenue CAGR was 12.8% at 2016 ROIC 19.5%
- EBITDA Margin is quite volatile: 21.2% in 2016, 7.8% in 2015, 7.2% in 2014, 21.4% in 2013, 16.4% in 2012
- Norbord Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: 95 in 2016, 59 in 2015, 107 in 2014, 79 in 2013, 22 in 2012
- The company has highly profitable business model: ROIC is at 19.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Norbord Inc ($NBD) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,149 | 1,343 | 1,601 | 1,509 | 1,766 | 17.0% |
| Gross Profit | 204 | 301 | 129 | 133 | 388 | 191.7% |
| SG&A | 16 | 14 | 14 | 16 | 14 | -12.5% |
| EBITDA | 188 | 287 | 115 | 117 | 374 | 219.7% |
| Net Income | 71 | 149 | -39 | -56 | 183 | |
Balance Sheet
|
|---|
| Cash | 128 | 193 | 92 | 9 | 161 | 1,688.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | 200 | |
| Long Term Debt | 433 | 433 | 748 | 775 | 546 | -29.5% |
Cash flow
|
|---|
| Capex | 22 | 79 | 107 | 59 | 95 | 61.0% |
Ratios
|
|---|
| Revenue growth | 19.1% | 16.9% | 19.2% | -5.7% | 17.0% | |
| EBITDA growth | 317.8% | 52.7% | -59.9% | 1.7% | 219.7% | |
| Gross Margin | 17.8% | 22.4% | 8.1% | 8.8% | 22.0% | 13.2% |
| EBITDA Margin | 16.4% | 21.4% | 7.2% | 7.8% | 21.2% | 13.4% |
| Net Income Margin | 6.2% | 11.1% | -2.4% | -3.7% | 10.4% | 14.1% |
| SG&A, % of revenue | 1.4% | 1.0% | 0.9% | 1.1% | 0.8% | -0.3% |
| CAPEX, % of revenue | 1.9% | 5.9% | 6.7% | 3.9% | 5.4% | 1.5% |
| ROIC | 15.2% | 24.0% | 2.4% | 2.2% | 19.5% | 17.3% |
| ROE | 20.7% | 34.6% | -6.9% | -9.5% | 31.3% | 40.8% |
| Net Debt/EBITDA | 1.6x | 0.8x | 5.7x | 6.5x | 1.6x | -5.0x |
Norbord Inc ($NBD) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 384 | 447 | 453 | 482 | 9.4% | 22.5% | 19.8% | -4.9% |
| EBITDA | 60 | 91 | 110 | 113 | 300.0% | 405.6% | 266.7% | 91.5% |
| Net Income | 23 | 44 | 55 | 61 | | | | |
Balance Sheet
|
|---|
| Cash | 14 | 12 | 74 | 161 | 250.0% | 20.0% | 3,600.0% | 1,688.9% |
| Short Term Debt | 200 | 200 | 200 | 200 | 6,566.7% | | | |
| Long Term Debt | 600 | 545 | 546 | 546 | 25.0% | -31.4% | -30.7% | -29.5% |
Ratios
|
|---|
| Gross Margin | 16.1% | 21.0% | 24.9% | 24.7% | 11.0% | 15.3% | 16.2% | 11.7% |
| EBITDA Margin | 15.6% | 20.4% | 24.3% | 23.4% | 11.4% | 15.4% | 16.3% | 11.8% |
| Net Income Margin | 6.0% | 9.8% | 12.1% | 12.7% | 16.5% | 16.1% | 14.5% | 16.2% |
Revenue and profitability
The company's Revenue surged on 17.0%. Revenue growth showed slow down in 16Q4 - it was -4.9% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 13.4 pp from 7.8% to 21.2% in 2016.
Gross Margin jumped on 13.2 pp from 8.8% to 22.0% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign jumped on 14.1 pp from -3.7% to 10.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 5.4%. Norbord Inc showed small CAPEX/Revenue decline of 0.50 pp from 5.9% in 2013 to 5.4% in 2016. It's average CAPEX/Revenue for the last three years was 5.3%.
Return on investment
The company operates at high and attractive ROE (31.31%) while ROIC is a bit lower (19.50%). ROIC surged on 17.3 pp from 2.2% to 19.5% in 2016. ROE surged on 40.8 pp from -9.5% to 31.3% in 2016.
Leverage (Debt)
Debt level is 1.6x Net Debt / EBITDA and 2.0x Debt / EBITDA. Net Debt / EBITDA dropped on 5.0x from 6.5x to 1.6x in 2016. Debt decreased on 3.7% while cash surged on 1,689%.
Management team
Norbord Inc's CEO Peter Cornelius Wijnbergen is a founder and has spent 4 years at the company. 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Progressive Waste Solutions Ltd ($BIN) | | 16.1% | 7.8% | 1.8% | 59.4% |
| Baylin Technologies Inc ($BYL) | | 16.5% | -44.0% | -4.1% | 47.5% |
| CCL Industries Inc ($CCL.B) | | 44.4% | 36.8% | 17.5% | 30.8% |
| Stantec Inc ($STN) | | 17.9% | 13.3% | 14.4% | 30.5% |
| Avigilon Corp ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
| |
|---|
| Median (51 companies) | | 4.9% | 9.9% | 8.5% | 2.6% |
|---|
| Norbord Inc ($NBD) | | 16.9% | 19.2% | -5.7% | 17.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($PUR) | 77.9% | 78.0% | 77.5% | 75.6% | |
| WSP Global Inc ($WSP) | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% |
| Avigilon Corp ($AVO) | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% |
| Stantec Inc ($STN) | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% |
| IWG Technologies Inc ($IWG) | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% |
| |
|---|
| Median (49 companies) | 23.9% | 24.0% | 21.9% | 21.9% | 22.9% |
|---|
| Norbord Inc ($NBD) | 17.8% | 22.4% | 8.1% | 8.8% | 22.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($CNR) | 46.5% | 45.9% | 46.8% | 50.9% | 54.3% |
| Canadian Pacific Railway Ltd ($CP) | 26.1% | 32.4% | 43.7% | 48.9% | 51.6% |
| Badger Daylighting Ltd ($BAD) | 25.7% | 25.9% | 27.9% | 24.6% | 24.2% |
| IWG Technologies Inc ($IWG) | 12.7% | 25.5% | 20.0% | 24.0% | 26.9% |
| Winpak Ltd ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| |
|---|
| Median (53 companies) | 10.2% | 8.3% | 8.6% | 9.5% | 11.0% |
|---|
| Norbord Inc ($NBD) | 16.4% | 21.4% | 7.2% | 7.8% | 21.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($NAL) | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% |
| Cargojet Inc ($CJT.A) | 7.0% | 6.3% | 54.1% | 41.3% | |
| Algoma Central Corp ($ALC) | 15.9% | 7.3% | 5.0% | 27.4% | 58.2% |
| Canadian Pacific Railway Ltd ($CP) | 20.2% | 20.2% | 21.9% | 22.7% | 19.0% |
| Canadian National Railway Co ($CNR) | 17.4% | 18.7% | 18.9% | 21.5% | 22.4% |
| |
|---|
| Median (54 companies) | 3.2% | 3.6% | 4.3% | 3.7% | 3.9% |
|---|
| Norbord Inc ($NBD) | 1.9% | 5.9% | 6.7% | 3.9% | 5.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($IBG) | 4.8% | -9.0% | 11.6% | 21.9% | 26.2% |
| IWG Technologies Inc ($IWG) | 17.0% | 36.3% | 23.4% | 27.2% | 25.7% |
| Winpak Ltd ($WPK) | 20.4% | 18.0% | 18.3% | 22.6% | 21.8% |
| Toromont Industries Ltd ($TIH) | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% |
| Intertape Polymer Group Inc ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| |
|---|
| Median (55 companies) | 12.2% | 9.6% | 11.5% | 8.9% | 8.5% |
|---|
| Norbord Inc ($NBD) | 15.2% | 24.0% | 2.4% | 2.2% | 19.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($CFF) | | 2.7x | 6.1x | 35.9x | 3.6x |
| Ag Growth International Inc ($AFN) | 2.9x | -0.1x | 2.1x | 14.1x | |
| Cargojet Inc ($CJT.A) | 1.5x | 1.5x | 31.5x | 12.9x | |
| Progressive Waste Solutions Ltd ($BIN) | 4.5x | 3.3x | 2.9x | 10.6x | 3.8x |
| Finning International Inc ($FTT) | 2.3x | 1.8x | 1.4x | 9.4x | 2.5x |
| |
|---|
| Median (49 companies) | 1.5x | 1.6x | 1.2x | 1.0x | 2.1x |
|---|
| Norbord Inc ($NBD) | 1.6x | 0.8x | 5.7x | 6.5x | 1.6x |
