Sun Life Financial Inc reports 48.2% revenue growth in 2016
15.02.2017 • About Sun Life Financial Inc (
$SLF) • By InTwits
Sun Life Financial Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sun Life Financial Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially unprofitable business model: ROIC is at 2.7%
- It operates with high leverage: Net Debt/EBITDA is 10.2x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sun Life Financial Inc ($SLF) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 17,559 | 13,874 | 25,764 | 19,274 | 28,573 | 48.2% |
| Net Income | 1,674 | 1,060 | 1,873 | 2,285 | 2,581 | 13.0% |
Balance Sheet
|
|---|
| Cash | 7,026 | 7,636 | 6,818 | 8,983 | 8,642 | -3.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 5,589 | 5,252 | 5,017 | 4,740 | 5,135 | 8.3% |
Cash flow
|
|---|
| Capex | 181 | 67 | 0 | 106 | 131 | 23.6% |
Ratios
|
|---|
| Revenue growth | -11.5% | -21.0% | 85.7% | -25.2% | 48.2% | |
| Net Income Margin | 9.5% | 7.6% | 7.3% | 11.9% | 9.0% | -2.8% |
| CAPEX, % of revenue | 1.0% | 0.5% | 0.0% | 0.5% | 0.5% | -0.1% |
| ROIC | 1.8% | 2.2% | 2.3% | 2.4% | 2.7% | 0.2% |
| ROE | 11.5% | 6.6% | 11.3% | 12.3% | 12.8% | 0.5% |
Sun Life Financial Inc ($SLF) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 8,782 | 9,533 | 7,892 | 2,366 | 19.8% | 466.8% | 68.2% | -57.5% |
| Net Income | 564 | 504 | 762 | 751 | 20.8% | -33.0% | 50.6% | 34.1% |
Balance Sheet
|
|---|
| Cash | 7,583 | 6,544 | 7,992 | 8,642 | 12.4% | -12.2% | -0.7% | -3.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 5,089 | 4,139 | 5,134 | 5,135 | 1.1% | -17.7% | -7.3% | 8.3% |
Ratios
|
|---|
| Net Income Margin | 6.4% | 5.3% | 9.7% | 31.7% | 0.1% | -39.4% | -1.1% | 21.7% |
Revenue and profitability
Sun Life Financial Inc's Revenue jumped on 48.2%. Revenue growth showed slow down in 16Q4 - it was -57.5% YoY.
Net Income marign decreased on 2.8 pp from 11.9% to 9.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.46% in 2016. CAPEX/Revenue showed almost no change from 2013 to 2016.
Return on investment
The company operates at good ROE (12.85%) while ROIC is low (2.66%). ROIC showed almost no change in 2016. ROE increased slightly on 0.52 pp from 12.3% to 12.8% in 2016.
Leverage (Debt)
Debt increased on 8.3% while cash decreased on 3.8%.
Management team
Sun Life Financial Inc's CEO is Dean Arthur Connor. Dean Arthur Connor is a founder and has 7 years tenure at the company. The company's CFO is Colm Joseph Freyne. Colm Joseph Freyne has 9 years tenure at the company.
Appendix 1: Peers in Financial
Below we provide Sun Life Financial Inc benchmarking against other companies in Financial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Grenville Strategic Royalty Corp ($GRC) | | | | 317.2% | |
| StorageVault Canada Inc ($SVI) | | 22.2% | 7.5% | 111.8% | |
| Slate Retail REIT ($SRT.UN) | | 316.8% | 229.7% | 92.5% | 21.6% |
| Mogo Finance Technology Inc ($GO) | | 13.7% | 34.6% | 86.0% | 14.6% |
| Morguard Corp ($MRC) | | 27.2% | 9.2% | 58.8% | 4.6% |
| |
|---|
| Median (53 companies) | | 7.5% | 9.0% | 3.6% | 5.1% |
|---|
| Sun Life Financial Inc ($SLF) | | -21.0% | 85.7% | -25.2% | 48.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($OLY) | 80.9% | 82.6% | 83.2% | 84.5% | 83.5% |
| Morguard Corp ($MRC) | 74.0% | 69.9% | 68.6% | 76.5% | 75.5% |
| Mogo Finance Technology Inc ($GO) | 70.4% | 64.5% | 63.4% | 62.3% | |
| StorageVault Canada Inc ($SVI) | 18.2% | 22.6% | 18.3% | 52.4% | |
| Clarke Inc ($CKI) | 28.1% | 20.0% | 18.9% | 43.4% | 41.6% |
| |
|---|
| Median (9 companies) | 28.1% | 30.7% | 28.3% | 43.4% | 30.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 87.6% | 87.9% | 88.8% | 86.6% | |
| Equitable Group Inc ($EQB) | 88.1% | 87.4% | 86.0% | 84.7% | 83.0% |
| Atrium Mortgage Investment Corp ($AI) | 79.8% | | | 81.9% | 83.2% |
| Trez Capital Mortgage Investment Corp ($TZZ) | | | | 76.2% | |
| First National Financial Corp ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| |
|---|
| Median (37 companies) | 43.7% | 33.5% | 39.8% | 32.5% | 43.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dundee Corp ($DC.A) | 10.3% | 14.1% | 88.8% | 123.6% | |
| Gazit-Globe Ltd ($GZT) | 80.2% | 43.3% | 52.1% | 69.3% | 95.5% |
| First Capital Realty Inc ($FCR) | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% |
| Killam Properties Inc ($KMP) | 80.7% | 114.1% | 143.5% | 46.7% | 59.9% |
| StorageVault Canada Inc ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| |
|---|
| Median (55 companies) | 0.5% | 0.6% | 0.7% | 0.7% | 0.9% |
|---|
| Sun Life Financial Inc ($SLF) | 1.0% | 0.5% | 0.0% | 0.5% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CI Financial Corp ($CIX) | | | | | 24.1% |
| FirstService Corp ($FSV) | | | | | 17.4% |
| IGM Financial Inc ($IGM) | 14.2% | 14.2% | 13.7% | 13.7% | 13.1% |
| Alaris Royalty Corp ($AD) | 9.5% | 10.1% | 10.7% | 7.3% | 12.3% |
| Genworth MI Canada Inc ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (55 companies) | 4.8% | 4.3% | 4.3% | 3.5% | 3.2% |
|---|
| Sun Life Financial Inc ($SLF) | 1.8% | 2.2% | 2.3% | 2.4% | 2.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Element Financial Corp ($EFN) | 140.2x | 31.9x | 37.6x | 79.9x | 22.6x |
| First National Financial Corp ($FN) | 34.3x | 33.7x | 40.9x | 37.4x | |
| StorageVault Canada Inc ($SVI) | 11.2x | 9.7x | 13.6x | 35.7x | |
| Gazit-Globe Ltd ($GZT) | 12.8x | 12.7x | 15.3x | 22.1x | 15.2x |
| Equitable Group Inc ($EQB) | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x |
| |
|---|
| Median (28 companies) | 5.3x | 4.6x | 4.7x | 6.0x | 7.8x |
|---|
