AIA Group Ltd Net Income dropped on 19.9% in 2015
25/02/2016 • About AIA Group Ltd (
$1299) • By InTwits
AIA Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- AIA Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's in pair with industry average of 5.9%.
- CAPEX is quite volatile: 139 in FY2015, 456 in FY2014, 472 in FY2013, 406 in FY2012, 88 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.5%
- It operates with high leverage: Net Debt/EBITDA is 6.4x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
AIA Group Ltd ($1299) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 14,163 | 20,154 | 21,892 | 25,433 | 23,347 | -8.2% |
| Net Income | 1,600 | 3,019 | 2,824 | 3,450 | 2,765 | -19.9% |
Balance Sheet
|
|---|
| Cash | 4,303 | 2,948 | 2,316 | 1,835 | 1,992 | 8.6% |
| Short Term Debt | 670 | 1,792 | 1,889 | 3,753 | 3,085 | -17.8% |
| Long Term Debt | 559 | 766 | 1,950 | 2,934 | 3,195 | 8.9% |
Cash flow
|
|---|
| Capex | 88 | 406 | 472 | 456 | 139 | -69.5% |
Ratios
|
|---|
| Revenue growth | -22.6% | 42.3% | 8.6% | 16.2% | -8.2% | |
| Net Income Margin | 11.3% | 15.0% | 12.9% | 13.6% | 11.8% | -1.7% |
| CAPEX, % of revenue | 0.6% | 2.0% | 2.2% | 1.8% | 0.6% | -1.2% |
| ROIC | 2.0% | 3.1% | 2.9% | 3.2% | 2.5% | -0.7% |
| ROE | 7.8% | 12.6% | 11.0% | 12.4% | 8.9% | -3.5% |
Revenue and profitability
The company's Revenue decreased on 8.2% in FY2015.
Net Income marign decreased slightly on 1.7 pp from 13.6% to 11.8% in FY2015.
Capital expenditures (CAPEX) and working capital investments
AIA Group Ltd's CAPEX/Revenue was 0.60% in FY2015. The company showed small CAPEX/Revenue decline of 1.4 pp from 2.0% in FY2012 to 0.60% in FY2015. It's average level of CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at low ROIC (2.49%) and ROE (8.93%). ROIC decreased slightly on 0.70 pp from 3.2% to 2.5% in FY2015. ROE decreased on 3.5 pp from 12.4% to 8.9% in FY2015.
Leverage (Debt)
Debt decreased on 6.1% in FY2015 while cash increased on 8.6% in FY2015.
Management team
The company's CEO Mark Edward Tucker has spent 8 years at the company.
Appendix 1: Peers in Insurance
Below we provide AIA Group Ltd benchmarking against other companies in Insurance 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 |
|---|
| Manulife Financial Corp ($945) | | -43.8% | -37.7% | 203.5% | -38.2% |
| Ping An Insurance Group Co of China Ltd ($2318) | 39.5% | 25.1% | 24.2% | 25.8% | |
| PICC Property & Casualty Co Ltd ($2328) | 6.9% | 18.7% | 18.1% | 16.9% | |
| People's Insurance Co Group of China Ltd ($1339) | 7.5% | 8.9% | 18.4% | 15.3% | |
| China Pacific Insurance Group Co Ltd ($2601) | 10.0% | 7.5% | 15.0% | 12.5% | |
| |
|---|
| Median (9 companies) | 6.3% | 8.9% | 15.0% | 12.5% | -38.2% |
|---|
| AIA Group Ltd ($1299) | | 42.3% | 8.6% | 16.2% | -8.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Financial Holdings Ltd ($662) | 0.1% | 0.3% | 0.0% | 14.0% | |
| China Taiping Insurance Holdings Co Ltd ($966) | 0.7% | 1.2% | 2.3% | 4.9% | |
| Ping An Insurance Group Co of China Ltd ($2318) | 2.0% | 2.5% | 2.4% | 2.6% | |
| China Pacific Insurance Group Co Ltd ($2601) | 1.1% | 1.8% | 1.9% | 1.7% | |
| New China Life Insurance Co Ltd ($1336) | 1.4% | 1.2% | 1.6% | 1.6% | |
| |
|---|
| Median (9 companies) | 1.4% | 1.4% | 1.2% | 1.6% | 0.0% |
|---|
| AIA Group Ltd ($1299) | 0.6% | 2.0% | 2.2% | 1.8% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| PICC Property & Casualty Co Ltd ($2328) | 6.3% | 7.0% | 6.4% | 7.4% | |
| Asia Financial Holdings Ltd ($662) | -2.7% | 4.7% | 2.6% | 3.7% | |
| People's Insurance Co Group of China Ltd ($1339) | 3.1% | 3.1% | 2.7% | 3.2% | |
| China Pacific Insurance Group Co Ltd ($2601) | 2.6% | 1.7% | 2.5% | 2.6% | |
| China Taiping Insurance Holdings Co Ltd ($966) | 0.8% | 1.1% | 1.3% | 2.2% | |
| |
|---|
| Median (9 companies) | 1.4% | 1.4% | 1.9% | 2.2% | 1.1% |
|---|
| AIA Group Ltd ($1299) | 2.0% | 3.1% | 2.9% | 3.2% | 2.5% |
