HSBC Holdings revenue decline continued to 4.1% in 2015 vs. 3.3% a year earliner
22/02/2016 • About HSBC Holdings (
$5) • By InTwits
HSBC Holdings reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- HSBC Holdings is a company in decline: 2015 revenue growth was -4.1%, 5 years revenue CAGR was -3.1%
- HSBC Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 6.1%.
- CAPEX is quite volatile: 1,077 in 2015, 360 in 2014, 489 in 2013, 599 in 2012, 671 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.5%
- It operates with high leverage: Net Debt/EBITDA is 9.5x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
HSBC Holdings ($5) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 98,960 | 91,079 | 83,837 | 81,086 | 77,769 | -4.1% |
| Net Income | 16,797 | 14,027 | 16,204 | 13,688 | 13,522 | -1.2% |
Balance Sheet
|
|---|
| Cash | 138,110 | 148,835 | 172,620 | 134,884 | 104,702 | -22.4% |
| Short Term Debt | 378,014 | 411,992 | 336,237 | 267,998 | 195,985 | -26.9% |
| Long Term Debt | 161,619 | 148,940 | 133,056 | 122,611 | 111,651 | -8.9% |
Cash flow
|
|---|
| Capex | 1,505 | 1,318 | 1,952 | 1,477 | 1,352 | -8.5% |
Ratios
|
|---|
| Revenue growth | 8.9% | -8.0% | -8.0% | -3.3% | -4.1% | |
| Net Income Margin | 17.0% | 15.4% | 19.3% | 16.9% | 17.4% | 0.5% |
| CAPEX, % of revenue | 1.5% | 1.4% | 2.3% | 1.8% | 1.7% | -0.1% |
| ROIC | 2.5% | 2.3% | 2.8% | 2.4% | 2.5% | 0.2% |
| ROE | 10.6% | 8.1% | 8.8% | 7.0% | 6.6% | -0.4% |
Revenue and profitability
HSBC Holdings's Revenue decreased on 4.1% in 2015.
Net Income marign increased slightly on 0.51 pp from 16.9% to 17.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 1.7%. HSBC Holdings's CAPEX/Revenue showed almost no change from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 2.0%.
Return on investment
The company operates at low ROIC (2.52%) and ROE (6.64%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt dropped on 21.2% in 2015 while cash dropped on 22.4% in 2015.
Management team
The company's CEO is Stuart Gulliver. Stuart Gulliver has 7 years tenure at the company. HSBC Holdings's CFO Iain James Mackay has spent 7 years at the company.
Appendix 1: Peers in Banks
Below we provide HSBC Holdings benchmarking against other companies in Banks 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 |
|---|
| Chong Hing Bank Ltd ($1111) | 14.2% | 10.0% | -1.2% | 121.1% | |
| China Merchants Bank Co Ltd ($3968) | 42.3% | 24.0% | 18.6% | 33.9% | |
| Harbin Bank Co Ltd ($6138) | 104.6% | 58.3% | 12.1% | 29.2% | |
| Dah Sing Financial Holdings Ltd ($440) | 15.3% | 9.9% | -0.1% | 29.0% | |
| China CITIC Bank Corp Ltd ($998) | 46.7% | 30.5% | 19.5% | 29.0% | |
| |
|---|
| Median (20 companies) | 33.4% | 21.6% | 10.4% | 14.8% | -2.6% |
|---|
| HSBC Holdings ($5) | | -8.0% | -8.0% | -3.3% | -4.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Minsheng Banking Corp Ltd ($1988) | 5.0% | 5.2% | 6.8% | 7.6% | |
| Harbin Bank Co Ltd ($6138) | 20.0% | 19.8% | 9.9% | 6.5% | |
| Industrial & Commercial Bank of China Ltd ($1398) | 3.2% | 3.8% | 4.9% | 5.4% | |
| Bank of Communications Co Ltd ($3328) | 3.1% | 3.6% | 5.1% | 5.3% | |
| China CITIC Bank Corp Ltd ($998) | 1.7% | 2.3% | 2.9% | 4.8% | |
| |
|---|
| Median (20 companies) | 3.6% | 3.6% | 4.1% | 3.1% | 2.2% |
|---|
| HSBC Holdings ($5) | 1.5% | 1.4% | 2.3% | 1.8% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chong Hing Bank Ltd ($1111) | 6.3% | 5.5% | 5.2% | 16.4% | |
| China Construction Bank Corp ($939) | 11.6% | 11.1% | 11.7% | 10.8% | |
| Industrial & Commercial Bank of China Ltd ($1398) | 10.6% | 9.9% | 10.2% | 9.9% | |
| Agricultural Bank of China Ltd ($1288) | 10.3% | 9.9% | 10.0% | 9.3% | |
| Hang Seng Bank Ltd ($11) | 9.0% | 8.6% | 9.5% | 9.0% | 8.3% |
| |
|---|
| Median (20 companies) | 6.4% | 6.1% | 6.3% | 5.5% | 6.0% |
|---|
| HSBC Holdings ($5) | 2.5% | 2.3% | 2.8% | 2.4% | 2.5% |
