HSBC Holdings reports 4.1% revenue decline in 2015
22 Feb 2016 • About HSBC Holdings (
$HSBA) • By InTwits
HSBC Holdings reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- HSBC Holdings is a company in decline: 2015 revenue growth was -4.1%, 5 years revenue CAGR was -3.1%
- HSBC Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 12.0%.
- CAPEX is quite volatile: 5,372 in 2015, 8,815 in 2014, 9,559 in 2013, 2,970 in 2012, 2,606 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.5%
- It operates with high leverage: Net Debt/EBITDA is 3.4x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
HSBC Holdings ($HSBA) 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%. The company showed almost no change in CAPEX/Revenue from 2012 to 2015. For the last three years the average CAPEX/Revenue 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 Stuart Gulliver is a founder and has spent 7 years at the company. The company's CFO is Iain James Mackay. Iain James Mackay has 7 years tenure at the company.
Appendix 1: Peers in Banks
Below you can find HSBC Holdings benchmarking vs. other companies in Banks 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.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Banque Intl Arabe De Tunisie ($BIND) | 9.5% | -20.2% | 17.3% | 50.2% | |
| European Islamic Investment Bank ($EIIB) | -41.8% | 121.2% | 12.6% | 42.3% | |
| Tsb Banking Grp ($TSB) | | -3.2% | -33.8% | 39.2% | -1.4% |
| VTB Bank JSC ($VTBR) | 23.8% | 48.1% | 16.5% | 29.8% | |
| Bank Audi S.A.L. ($BQAD) | | 9.1% | 11.7% | 23.9% | 7.1% |
| |
|---|
| Median (43 companies) | 9.5% | 10.2% | 4.8% | 12.1% | 4.0% |
|---|
| HSBC Holdings ($HSBA) | | -8.0% | -8.0% | -3.3% | -4.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lloyds Banking Group ($LLPC) | | 8.0% | 8.9% | 13.1% | 13.6% |
| Banco Santander Sa ($BNC) | 2.2% | 2.7% | 2.6% | 8.9% | 10.2% |
| Finansbank ($FBKD) | 2.0% | 1.9% | 2.8% | 8.5% | 2.7% |
| Tsb Banking Grp ($TSB) | 1.3% | 1.8% | 4.4% | 7.2% | 3.4% |
| Guaranty Trust Bank ($GRTB) | 10.0% | 6.7% | 6.1% | 6.8% | |
| |
|---|
| Median (40 companies) | 2.4% | 2.4% | 2.8% | 2.2% | 2.5% |
|---|
| HSBC Holdings ($HSBA) | 1.5% | 1.4% | 2.3% | 1.8% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 16.3% | 21.7% | 26.9% | 30.1% | 30.3% |
| Guaranty Trust Bank ($GRTB) | 14.2% | 19.8% | 18.9% | 17.8% | |
| Mcb Bank Ltd ($MCBS) | 18.7% | 15.0% | 14.4% | 15.8% | 14.9% |
| Zenith Bank ($ZENB) | 13.8% | 19.0% | 17.6% | 15.0% | |
| United Bank Ltd ($UBLS) | 12.6% | 11.7% | 11.8% | 13.8% | 12.6% |
| |
|---|
| Median (43 companies) | 7.1% | 6.4% | 5.7% | 4.5% | 3.3% |
|---|
| HSBC Holdings ($HSBA) | 2.5% | 2.3% | 2.8% | 2.4% | 2.5% |
