Prudential revenue dropped on 31.3% in 2015
09/03/2016 • About Prudential (
$2378) • By InTwits
Prudential reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Prudential is a company in decline: 2015 revenue growth was -31.3%, 5 years revenue CAGR was -2.8%
- Prudential has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has potentially unprofitable business model: ROIC is at 0.9%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Prudential ($2378) key annual financial indicators
| mln. £ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 36,506 | 54,438 | 52,375 | 60,126 | 41,305 | -31.3% |
| Net Income | 1,415 | 2,163 | 1,346 | 2,216 | 2,579 | 16.4% |
Balance Sheet
|
|---|
| Cash | 7,257 | 6,126 | 6,785 | 6,409 | 7,782 | 21.4% |
| Short Term Debt | 4,312 | 3,213 | 3,047 | 3,356 | 3,292 | -1.9% |
| Long Term Debt | 3,611 | 3,554 | 4,636 | 4,304 | 5,011 | 16.4% |
Cash flow
|
|---|
| Capex | 124 | 139 | 221 | 172 | 256 | 48.8% |
Ratios
|
|---|
| Revenue growth | -23.4% | 49.1% | -3.8% | 14.8% | -31.3% | |
| Net Income Margin | 3.9% | 4.0% | 2.6% | 3.7% | 6.2% | 2.6% |
| CAPEX, % of revenue | 0.3% | 0.3% | 0.4% | 0.3% | 0.6% | 0.3% |
| ROIC | 0.8% | 1.1% | 0.6% | 0.8% | 0.9% | 0.1% |
| ROE | 17.1% | 22.9% | 13.5% | 20.7% | 20.8% | 0.2% |
Revenue and profitability
Prudential's Revenue dropped on 31.3% in 2015.
Net Income marign increased on 2.6 pp from 3.7% to 6.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.62%. CAPEX/Revenue showed almost no change from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 0.44%.
Return on investment
The company operates at good ROE (20.83%) while ROIC is low (0.92%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt increased on 8.4% in 2015 while cash jumped on 21.4% in 2015.
Management team
Prudential's CEO Michael A Wells "Mike" has spent 3 years at the company. Prudential's CFO is Nicolaos Andreas Nicandrou. Nicolaos Andreas Nicandrou has 9 years tenure at the company.
Appendix 1: Peers in Life Insurance
Below you can find Prudential benchmarking vs. other companies in Life Insurance industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
