Sun Life Financial Inc revenue started to decline in 2015: dropped 25.2% vs. 85.7% growth a year earliner
10.02.2016 • About Sun Life Financial Inc (
$SLF) • By InTwits
Sun Life Financial Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sun Life Financial Inc is a company in decline: 2015 revenue growth was -25.2%, 5 years revenue CAGR was -4.9%
- Sun Life Financial Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially unprofitable business model: ROIC is at 2.4%
- It operates with high leverage: Net Debt/EBITDA is 8.8x while industry average is 5.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sun Life Financial Inc ($SLF) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 19,830 | 17,559 | 13,874 | 25,764 | 19,274 | -25.2% |
| Net Income | -270 | 1,674 | 1,060 | 1,873 | 2,285 | 22.0% |
Balance Sheet
|
|---|
| Cash | 8,837 | 7,026 | 7,636 | 6,818 | 8,983 | 31.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 4,895 | 5,589 | 5,252 | 5,017 | 4,740 | -5.5% |
Cash flow
|
|---|
| Capex | 120 | 181 | 67 | 0 | 106 | |
Ratios
|
|---|
| Revenue growth | -20.0% | -11.5% | -21.0% | 85.7% | -25.2% | |
| Net Income Margin | -1.4% | 9.5% | 7.6% | 7.3% | 11.9% | 4.6% |
| CAPEX, % of revenue | 0.6% | 1.0% | 0.5% | 0.0% | 0.5% | 0.5% |
| ROIC | 0.5% | 1.8% | 2.2% | 2.3% | 2.4% | 0.2% |
| ROE | -2.5% | 11.5% | 6.6% | 11.3% | 12.3% | 1.0% |
Revenue and profitability
The company's Revenue dropped on 25.2% in 2015.
Net Income marign increased on 4.6 pp from 7.3% to 11.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.55% in 2015. The company's CAPEX/Revenue showed almost no change from 2012 to 2015.
Return on investment
The company operates at good ROE (12.32%) while ROIC is low (2.43%). ROIC showed almost no change in 2015. ROE increased slightly on 1.0 pp from 11.3% to 12.3% in 2015.
Leverage (Debt)
Debt decreased on 5.5% in 2015 while cash surged on 31.8% in 2015.
Management team
The company's CEO is Dean Arthur Connor. Dean Arthur Connor is a founder and has 6 years tenure at the company. Colm Joseph Freyne is a The company's CFO. Colm Joseph Freyne has spent 9 years at the company.
Appendix 1: Peers in Financial
Below we provide Sun Life Financial Inc benchmarking against other companies in Financial 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 | 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 ($GS) | | -39.1% | 60.6% | 97.9% | -33.5% |
| |
|---|
| Median (73 companies) | 9.9% | 9.4% | 7.4% | 8.9% | 1.1% |
|---|
| Sun Life Financial Inc ($SLF) | | -11.5% | -21.0% | 85.7% | -25.2% |
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 ($OCX) | 20.0% | 20.1% | 26.2% | 27.9% | |
| |
|---|
| Median (11 companies) | 25.2% | 22.6% | 25.7% | 20.5% | 27.7% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Firm Capital Mortgage Investment Corp ($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) | 35.8% | 32.5% | 32.1% | 31.5% | 46.5% |
|---|
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% | 56.3% |
| First Capital Realty Inc ($FCR) | 102.8% | 127.9% | 76.1% | 73.8% | |
| |
|---|
| Median (75 companies) | 1.3% | 1.6% | 0.8% | 1.0% | 1.1% |
|---|
| Sun Life Financial Inc ($SLF) | 0.6% | 1.0% | 0.5% | 0.0% | 0.5% |
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 ($SCB) | 2.3% | 10.9% | 11.0% | 13.4% | |
| |
|---|
| Median (77 companies) | 5.3% | 4.8% | 4.6% | 4.8% | 5.4% |
|---|
| Sun Life Financial Inc ($SLF) | 0.5% | 1.8% | 2.2% | 2.3% | 2.4% |
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) | 4.1x | 5.2x | 4.8x | 4.3x | 1.9x |
|---|
