National Bank of Canada reports 5.4% Net Income growth
02.12.2015 • About National Bank of Canada (
$NA) • By InTwits
National Bank of Canada reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- National Bank of Canada has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 4.4%.
- CAPEX is quite volatile: 130 in FY2015, 50 in FY2014, 146 in FY2013, 176 in FY2012, 136 in FY2011
- The company has potentially unprofitable business model: ROIC is at 3.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
National Bank of Canada ($NA) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,305 | 7,102 | 7,124 | 7,516 | 7,645 | 1.7% |
| Net Income | 1,224 | 1,561 | 1,449 | 1,469 | 1,549 | 5.4% |
Balance Sheet
|
|---|
| Cash | 2,851 | 3,249 | 3,596 | 8,086 | 7,567 | -6.4% |
| Short Term Debt | 18,146 | 18,124 | 18,909 | 18,167 | 17,333 | -4.6% |
| Long Term Debt | 2,000 | 2,470 | 4,868 | 3,877 | 3,393 | -12.5% |
Cash flow
|
|---|
| Capex | 136 | 176 | 146 | 50 | 130 | 160.0% |
Ratios
|
|---|
| Revenue growth | 19.6% | 12.6% | 0.3% | 5.5% | 1.7% | |
| Net Income Margin | 19.4% | 22.0% | 20.3% | 19.5% | 20.3% | 0.7% |
| CAPEX, % of revenue | 2.2% | 2.5% | 2.0% | 0.7% | 1.7% | 1.0% |
| ROIC | 3.5% | 4.0% | 3.5% | 3.6% | 3.9% | 0.3% |
| ROE | 19.2% | 24.9% | 20.2% | 17.9% | 16.7% | -1.2% |
Revenue and profitability
The company's Revenue increased slightly on 1.7% in FY2015.
Net Income marign increased slightly on 0.72 pp from 19.5% to 20.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
National Bank of Canada's CAPEX/Revenue was 1.7% in FY2015. The company's CAPEX/Revenue decreased slightly on 0.78 pp from 2.5% in FY2012 to 1.7% in FY2015. Average CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at good ROE (16.70%) while ROIC is low (3.86%). ROIC showed almost no change in FY2015. ROE decreased slightly on 1.2 pp from 17.9% to 16.7% in FY2015.
Leverage (Debt)
Debt decreased on 6.0% in FY2015 while cash decreased on 6.4% in FY2015.
Management team
Louis Vachon is a National Bank of Canada's CEO. Louis Vachon is a founder and has spent 11 years at the company. The company's CFO is Ghislain Parent. Ghislain Parent has 7 years tenure at the company.
Appendix 1: Peers in Financial
Below you can find National Bank of Canada benchmarking vs. other companies in Financial 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 |
|---|
| Westaim Corp/The ($WED) | 35.7% | -99.9% | 38.0% | 5,680.8% | |
| Wall Financial Corp ($WFC) | | 35.2% | -74.1% | 285.4% | -75.3% |
| Element Financial Corp ($EFN) | | | 206.6% | 189.1% | |
| DealNet Capital Corp ($DLS) | -73.3% | 4,437.5% | 540.4% | 112.7% | |
| Gluskin Sheff + Associates Inc ($GS) | | -39.1% | 60.6% | 97.9% | -33.5% |
| |
|---|
| Median (72 companies) | 11.2% | 7.7% | 7.2% | 8.9% | -6.5% |
|---|
| National Bank of Canada ($NA) | | 12.6% | 0.3% | 5.5% | 1.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Olympia Financial Group Inc ($OLY) | 85.3% | 80.9% | 82.6% | 83.2% | |
| Morguard Corp ($MRC) | 74.8% | 74.0% | 69.9% | 68.6% | |
| DealNet Capital Corp ($DLS) | | 14.9% | 36.7% | 45.6% | |
| Brookfield Asset Management Inc ($BAM.A) | 34.3% | 25.6% | 30.7% | 28.6% | |
| Onex Corp ($OCX) | 20.0% | 20.1% | 26.2% | 27.9% | |
| |
|---|
| Median (11 companies) | 25.2% | 22.6% | 25.7% | 20.5% | 16.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 88.7% | 87.6% | 87.9% | 88.8% | |
| Equitable Group Inc ($EQB) | 89.7% | 88.1% | 87.4% | 86.0% | |
| Alaris Royalty Corp ($AD) | 97.0% | 81.3% | 61.8% | 81.8% | |
| Brookfield Real Estate Services Inc ($BRE) | 77.1% | 77.7% | 77.9% | 78.4% | |
| First National Financial Corp ($FN) | 66.1% | 67.8% | 76.5% | 77.1% | |
| |
|---|
| Median (49 companies) | 35.6% | 32.3% | 32.1% | 31.5% | 47.9% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Killam Properties Inc ($KMP) | 73.6% | 80.7% | 114.1% | 143.5% | |
| Dundee Corp ($DC.A) | | 10.3% | 14.1% | 88.8% | 123.6% |
| StorageVault Canada Inc ($SVI) | 29.6% | 150.5% | 73.3% | 79.1% | |
| Mainstreet Equity Corp ($MEQ) | 152.4% | 115.8% | 62.3% | 75.8% | |
| First Capital Realty Inc ($FCR) | 102.8% | 127.9% | 76.1% | 73.8% | |
| |
|---|
| Median (74 companies) | 1.3% | 1.4% | 0.8% | 1.1% | 2.4% |
|---|
| National Bank of Canada ($NA) | 2.2% | 2.5% | 2.0% | 0.7% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gluskin Sheff + Associates Inc ($GS) | 71.3% | 21.0% | 82.9% | 153.9% | 63.6% |
| Brookfield Real Estate Services Inc ($BRE) | 17.1% | 26.0% | 31.0% | 47.0% | |
| Redishred Capital Corp ($KUT) | -3.9% | -24.5% | 6.5% | 15.8% | |
| IGM Financial Inc ($IGM) | 15.3% | 14.2% | 14.2% | 13.7% | |
| Street Capital Group Inc ($SCB) | 2.3% | 10.9% | 11.0% | 13.4% | |
| |
|---|
| Median (76 companies) | 5.3% | 4.8% | 4.6% | 4.8% | 5.4% |
|---|
| National Bank of Canada ($NA) | 3.5% | 4.0% | 3.5% | 3.6% | 3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First National Financial Corp ($FN) | 37.6x | 34.3x | 33.7x | 40.9x | |
| Element Financial Corp ($EFN) | | 140.2x | 31.9x | 37.6x | |
| Gazit-Globe Ltd ($GZT) | 14.8x | 12.8x | 12.7x | 15.3x | |
| Morguard Corp ($MRC) | 7.5x | 8.9x | | 14.2x | |
| StorageVault Canada Inc ($SVI) | 6.0x | 11.2x | 9.7x | 13.6x | |
| |
|---|
| Median (41 companies) | 5.3x | 5.3x | 4.8x | 4.3x | 6.6x |
|---|
