Valeant Pharmaceuticals International Inc Net Debt / EBITDA jumped on 5.4x from 7.3x to 12.7x in 2016 while Debt decreased on 4.0%
28.02.2017 • About Valeant Pharmaceuticals International Inc (
$VRX) • By InTwits
Valeant Pharmaceuticals International Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Valeant Pharmaceuticals International Inc doesn't have a profitable business model yet: 2016 ROIC is -1.4%
- Valeant Pharmaceuticals International Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 235 in 2016, 235 in 2015, 292 in 2014, 115 in 2013, 108 in 2012
- The company has unprofitable business model: ROIC is at -1.4%
- It operates with high leverage: Net Debt/EBITDA is 12.7x while industry average is 9.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Valeant Pharmaceuticals International Inc ($VRX) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,480 | 5,770 | 8,206 | 10,447 | 9,674 | -7.4% |
| Gross Profit | 2,511 | 3,864 | 5,970 | 7,862 | 7,063 | -10.2% |
| SG&A | 756 | 1,305 | 2,026 | 2,700 | 2,810 | 4.1% |
| EBITDA | 1,066 | 1,606 | 3,738 | 4,155 | 2,300 | -44.6% |
| Net Income | -116 | -866 | 881 | -292 | -2,409 | |
Balance Sheet
|
|---|
| Cash | 916 | 600 | 323 | 597 | 542 | -9.3% |
| Short Term Debt | 480 | 205 | 1 | 823 | 1 | -99.9% |
| Long Term Debt | 10,535 | 17,163 | 15,228 | 30,265 | 29,845 | -1.4% |
Cash flow
|
|---|
| Capex | 108 | 115 | 292 | 235 | 235 | -0.1% |
Ratios
|
|---|
| Revenue growth | 41.3% | 65.8% | 42.2% | 27.3% | -7.4% | |
| EBITDA growth | 16.8% | 50.7% | 132.7% | 11.1% | -44.6% | |
| Gross Margin | 72.1% | 67.0% | 72.8% | 75.3% | 73.0% | -2.2% |
| EBITDA Margin | 30.6% | 27.8% | 45.6% | 39.8% | 23.8% | -16.0% |
| Net Income Margin | -3.3% | -15.0% | 10.7% | -2.8% | -24.9% | -22.1% |
| SG&A, % of revenue | 21.7% | 22.6% | 24.7% | 25.8% | 29.0% | 3.2% |
| CAPEX, % of revenue | 3.1% | 2.0% | 3.6% | 2.3% | 2.4% | 0.2% |
| ROIC | 0.6% | -2.0% | 8.3% | 4.6% | -1.4% | -6.0% |
| ROE | -3.0% | -19.6% | 16.9% | -5.2% | -53.2% | -47.9% |
| Net Debt/EBITDA | 9.5x | 10.4x | 4.0x | 7.3x | 12.7x | 5.4x |
Valeant Pharmaceuticals International Inc ($VRX) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,372 | 2,420 | 2,480 | 2,403 | 9.3% | -11.4% | -11.0% | -13.8% |
| EBITDA | 813 | 1,016 | -12 | 485 | -16.9% | 4.0% | -101.1% | -55.2% |
| Net Income | -374 | -302 | -1,218 | -515 | -482.5% | | -2,561.4% | |
Balance Sheet
|
|---|
| Cash | 1,310 | 852 | 659 | 542 | -29.7% | -11.0% | -53.6% | -9.3% |
| Short Term Debt | 675 | 294 | 59 | 1 | 449.8% | -50.2% | -91.7% | -99.9% |
| Long Term Debt | 31,303 | 30,773 | 30,386 | 29,845 | 20.9% | 1.6% | 0.7% | -1.4% |
Ratios
|
|---|
| Gross Margin | 73.4% | 72.8% | 73.5% | 72.3% | -2.5% | -2.1% | -3.3% | -1.2% |
| EBITDA Margin | 34.3% | 42.0% | -0.5% | 20.2% | -10.8% | 6.2% | -42.6% | -18.6% |
| Net Income Margin | -15.8% | -12.5% | -49.1% | -21.4% | -20.3% | -10.6% | -50.9% | -9.4% |
Revenue and profitability
Valeant Pharmaceuticals International Inc's Revenue decreased on 7.4%. Revenue decline showed acceleration in 16Q4 - it was 13.8% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 16.0 pp from 39.8% to 23.8% in 2016.
Gross Margin decreased on 2.2 pp from 75.3% to 73.0% in 2016. SG&A as a % of Revenue increased on 3.2 pp from 25.8% to 29.0% in 2016.
Net Income marign dropped on 22.1 pp from -2.8% to -24.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Valeant Pharmaceuticals International Inc had CAPEX/Revenue of 2.4%. Valeant Pharmaceuticals International Inc's CAPEX/Revenue showed almost no change from 2013 to 2016. For the last three years the average CAPEX/Revenue was 2.7%.
Return on investment
The company operates at negative ROIC (-1.38%) and ROE (-53.16%). ROIC decreased on 6.0 pp from 4.6% to -1.4% in 2016. ROE dropped on 47.9 pp from -5.2% to -53.2% in 2016.
Leverage (Debt)
Debt level is 12.7x Net Debt / EBITDA and 13.0x Debt / EBITDA. Net Debt / EBITDA surged on 5.4x from 7.3x to 12.7x in 2016. Debt decreased on 4.0% while cash decreased on 9.3%.
Management team
Valeant Pharmaceuticals International Inc's CEO Joseph C Papa "Joe" is a founder and has spent 2 years at the company. Paul S Herendeen is a The company's CFO. Paul S Herendeen has spent 2 years at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide Valeant Pharmaceuticals International Inc benchmarking against other companies in Consumer, Non-cyclical 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 |
|---|
| Concordia Healthcare Corp ($CXR) | | | 159.5% | 275.7% | 107.0% |
| Heritage Global Inc ($HGP) | | -37.0% | 76.2% | 11.2% | 80.8% |
| EnerCare Inc ($ECI) | | 8.6% | 21.1% | 55.7% | 76.6% |
| CRH Medical Corp ($CRH) | | 12.5% | 56.0% | 284.2% | 70.2% |
| Nuvo Research Inc ($NRI) | | -25.3% | -29.1% | 57.0% | 31.9% |
| |
|---|
| Median (40 companies) | | 8.5% | 13.7% | 14.9% | 12.8% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | | 65.8% | 42.2% | 27.3% | -7.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | | 99.5% | 98.3% | 92.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 88.7% | 88.4% | 88.0% | 89.1% | 88.3% |
| Information Services Corp ($ISV) | 77.5% | 80.4% | 80.9% | 87.6% | 85.1% |
| Biosyent Inc ($RX) | 79.3% | 79.2% | 78.1% | 78.7% | |
| Concordia Healthcare Corp ($CXR) | | 79.4% | 86.0% | 76.1% | 72.9% |
| |
|---|
| Median (34 companies) | 29.5% | 35.0% | 35.6% | 33.4% | 28.9% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 72.1% | 67.0% | 72.8% | 75.3% | 73.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CRH Medical Corp ($CRH) | 21.0% | 24.5% | 29.1% | 44.1% | |
| Concordia Healthcare Corp ($CXR) | | 43.7% | 37.0% | 39.8% | -92.8% |
| Ritchie Bros Auctioneers Inc ($RBA) | 36.8% | 36.3% | 36.4% | 39.7% | 31.4% |
| EnerCare Inc ($ECI) | 52.8% | 51.0% | 45.5% | 39.3% | 26.6% |
| Information Services Corp ($ISV) | 39.6% | 39.6% | 37.6% | 36.1% | 32.7% |
| |
|---|
| Median (43 companies) | 9.1% | 12.0% | 12.7% | 11.0% | 10.0% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 30.6% | 27.8% | 45.6% | 39.8% | 23.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| ProMetic Life Sciences Inc ($PLI) | 2.1% | 33.6% | 34.6% | 23.3% | |
| EnerCare Inc ($ECI) | 25.7% | 26.5% | 23.6% | 20.7% | 15.5% |
| Black Diamond Group Ltd ($BDI) | 61.9% | 27.5% | 31.0% | 17.6% | |
| easyhome Ltd ($EH) | 32.2% | 25.6% | 21.6% | 16.9% | 12.7% |
| K-Bro Linen Inc ($KBL) | 10.0% | 19.0% | 11.4% | 16.6% | |
| |
|---|
| Median (42 companies) | 3.1% | 2.8% | 2.3% | 2.4% | 2.0% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 3.1% | 2.0% | 3.6% | 2.3% | 2.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Information Services Corp ($ISV) | 71.8% | 72.8% | 58.9% | 38.1% | 27.6% |
| Colliers International Group Inc ($CIG) | 10.5% | 11.2% | 15.2% | 10.9% | 26.1% |
| Nuvo Research Inc ($NRI) | -11.6% | -17.4% | -37.9% | 12.9% | 20.8% |
| International Road Dynamics Inc ($IRD) | 0.9% | 6.7% | 4.4% | 10.6% | 16.5% |
| Premium Brands Holdings Corp ($PBH) | 10.3% | 9.9% | 6.9% | 12.6% | 15.3% |
| |
|---|
| Median (43 companies) | 8.8% | 9.2% | 8.5% | 7.5% | 8.4% |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 0.6% | -2.0% | 8.3% | 4.6% | -1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Concordia Healthcare Corp ($CXR) | | -1.3x | 5.6x | 20.2x | |
| SunOpta Inc ($SOY) | 2.9x | 3.5x | 1.3x | 16.9x | 140.8x |
| Centric Health Corp ($CHH) | 5.6x | 10.2x | 11.2x | 15.6x | |
| Sienna Senior Living Inc ($SIA) | 9.5x | 11.8x | 9.2x | 9.1x | 9.1x |
| GDI Integrated Facility Services Inc ($GDI) | | | 3.5x | 5.2x | 3.5x |
| |
|---|
| Median (37 companies) | 2.8x | 2.2x | 3.3x | 2.3x | 2.7x |
|---|
| Valeant Pharmaceuticals International Inc ($VRX) | 9.5x | 10.4x | 4.0x | 7.3x | 12.7x |
