Brookfield Asset Management Inc reports 24.7% Net Income decline and 0.91 pp EBITDA Margin decline from 27.9% to 27.0%
12.02.2016 • About Brookfield Asset Management Inc (
$BAM.A) • By InTwits
Brookfield Asset Management Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Brookfield Asset Management Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.7%. At the same time it's in pair with industry average of 10.4%.
- CAPEX is quite volatile: 1,114 in 2015, 1,098 in 2014, 1,374 in 2013, 3,565 in 2012, 2,047 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.0%
- It operates with high leverage: Net Debt/EBITDA is 10.9x while industry average is 5.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Brookfield Asset Management Inc ($BAM.A) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 18,126 | 18,766 | 20,093 | 18,364 | 19,913 | 8.4% |
| Gross Profit | 6,220 | 4,805 | 6,165 | 5,246 | 5,480 | 4.5% |
| EBITDA | 6,052 | 4,647 | 6,013 | 5,123 | 5,374 | 4.9% |
| Net Income | 1,957 | 1,380 | 2,120 | 3,110 | 2,341 | -24.7% |
Balance Sheet
|
|---|
| Cash | 2,027 | 2,850 | 3,663 | 3,160 | 2,774 | -12.2% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 38,207 | 46,022 | 48,739 | 56,309 | 61,614 | 9.4% |
Cash flow
|
|---|
| Capex | 2,047 | 3,565 | 1,374 | 1,098 | 1,114 | 1.5% |
Ratios
|
|---|
| Revenue growth | 33.1% | 3.5% | 7.1% | -8.6% | 8.4% | |
| EBITDA growth | 40.5% | -23.2% | 29.4% | -14.8% | 4.9% | |
| Gross Margin | 34.3% | 25.6% | 30.7% | 28.6% | 27.5% | -1.0% |
| EBITDA Margin | 33.4% | 24.8% | 29.9% | 27.9% | 27.0% | -0.9% |
| Net Income Margin | 10.8% | 7.4% | 10.6% | 16.9% | 11.8% | -5.2% |
| CAPEX, % of revenue | 11.3% | 19.0% | 6.8% | 6.0% | 5.6% | -0.4% |
| ROIC | 7.2% | 3.9% | 4.6% | 3.4% | 3.0% | -0.3% |
| ROE | 12.5% | 7.2% | 11.0% | 15.6% | 10.6% | -5.0% |
| Net Debt/EBITDA | 6.0x | 9.3x | 7.5x | 10.4x | 10.9x | 0.6x |
Revenue and profitability
The company's Revenue increased on 8.4% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.91 pp from 27.9% to 27.0% in 2015.
Gross Margin decreased slightly on 1.0 pp from 28.6% to 27.5% in 2015.
Net Income marign decreased on 5.2 pp from 16.9% to 11.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Brookfield Asset Management Inc had CAPEX/Revenue of 5.6%. CAPEX/Revenue dropped on 13.4 pp from 19.0% in 2012 to 5.6% in 2015. For the last three years the average CAPEX/Revenue was 6.1%.
Return on investment
The company operates at low ROIC (3.04%) and ROE (10.58%). ROIC showed almost no change in 2015. ROE decreased on 5.0 pp from 15.6% to 10.6% in 2015.
Leverage (Debt)
Debt level is 10.9x Net Debt / EBITDA and 11.5x Debt / EBITDA. Net Debt / EBITDA jumped on 0.6x from 10.4x to 10.9x in 2015. Debt increased on 9.4% in 2015 while cash dropped on 12.2% in 2015.
Management team
J Bruce Flatt is a the company's CEO. J Bruce Flatt has spent 16 years at the company.
Appendix 1: Peers in Financial
Below we provide Brookfield Asset Management 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 ($GS) | | -39.1% | 60.6% | 97.9% | -33.5% |
| |
|---|
| Median (73 companies) | 9.9% | 9.4% | 7.4% | 8.9% | 0.4% |
|---|
| Brookfield Asset Management Inc ($BAM.A) | | 3.5% | 7.1% | -8.6% | 8.4% |
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 ($DLS) | | 14.9% | 36.7% | 45.6% | |
| Onex Corp ($OCX) | 20.0% | 20.1% | 26.2% | 27.9% | |
| Tuckamore Capital Management Inc ($TX) | | 19.3% | 21.0% | 20.5% | |
| |
|---|
| Median (10 companies) | 22.6% | 20.1% | 25.2% | 19.7% | 27.7% |
|---|
| Brookfield Asset Management Inc ($BAM.A) | 34.3% | 25.6% | 30.7% | 28.6% | 27.5% |
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 ($FN) | 66.1% | 67.8% | 76.5% | 77.1% | |
| |
|---|
| Median (48 companies) | 36.1% | 32.7% | 32.1% | 34.8% | 43.8% |
|---|
| Brookfield Asset Management Inc ($BAM.A) | 33.4% | 24.8% | 29.9% | 27.9% | 27.0% |
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 ($FCR) | 102.8% | 127.9% | 76.1% | 73.8% | |
| |
|---|
| Median (75 companies) | 1.2% | 1.2% | 0.7% | 1.0% | 1.0% |
|---|
| Brookfield Asset Management Inc ($BAM.A) | 11.3% | 19.0% | 6.8% | 6.0% | 5.6% |
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% | 13.7% |
| Street Capital Group Inc ($SCB) | 2.3% | 10.9% | 11.0% | 13.4% | |
| |
|---|
| Median (77 companies) | 4.9% | 4.8% | 4.5% | 4.8% | 5.3% |
|---|
| Brookfield Asset Management Inc ($BAM.A) | 7.2% | 3.9% | 4.6% | 3.4% | 3.0% |
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 ($SVI) | 6.0x | 11.2x | 9.7x | 13.6x | |
| |
|---|
| Median (40 companies) | 2.9x | 5.1x | 4.6x | 4.2x | 1.9x |
|---|
| Brookfield Asset Management Inc ($BAM.A) | 6.0x | 9.3x | 7.5x | 10.4x | 10.9x |
