Schroders reports 13.1% Net Income growth and 1.3 pp EBITDA Margin growth from 28.4% to 29.7%
03 Mar 2016 • About Schroders (
$SDRC) • By InTwits
Schroders reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 29.7% in 2015 vs. 28.4% in 2014 vs. 27.0% in 2011
- Schroders has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 1.6%.
- CAPEX is quite volatile: 38.8 in 2015, 29.5 in 2014, 25.8 in 2013, 12.8 in 2012, 12.7 in 2011
- The company has business model with low profitability: ROIC is at 9.9%
- It operates with high leverage: Net Debt/EBITDA is 0.1x while industry average is -1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Schroders ($SDRC) key annual financial indicators
| mln. £ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,502 | 1,425 | 1,809 | 1,924 | 2,043 | 6.2% |
| Gross Profit | 1,139 | 1,096 | 1,378 | 1,495 | 1,601 | 7.1% |
| EBITDA | 405 | 356 | 456 | 546 | 606 | 11.1% |
| Net Income | 316 | 283 | 353 | 413 | 467 | 13.1% |
Balance Sheet
|
|---|
| Cash | 2,339 | 2,543 | 2,534 | 3,535 | 3,019 | -14.6% |
| Short Term Debt | 2,203 | 2,217 | 2,099 | 2,982 | 2,887 | -3.2% |
| Long Term Debt | 396 | 342 | 238 | 187 | 187 | -0.2% |
Cash flow
|
|---|
| Capex | 13 | 13 | 26 | 30 | 39 | 31.5% |
Ratios
|
|---|
| Revenue growth | 4.3% | -5.1% | 26.9% | 6.4% | 6.2% | |
| EBITDA growth | 2.5% | -12.2% | 28.1% | 19.8% | 11.1% | |
| Gross Margin | 75.8% | 76.9% | 76.2% | 77.7% | 78.3% | 0.6% |
| EBITDA Margin | 27.0% | 25.0% | 25.2% | 28.4% | 29.7% | 1.3% |
| Net Income Margin | 21.0% | 19.9% | 19.5% | 21.5% | 22.9% | 1.4% |
| CAPEX, % of revenue | 0.8% | 0.9% | 1.4% | 1.5% | 1.9% | 0.4% |
| ROIC | 11.7% | 7.6% | 9.4% | 10.0% | 9.9% | -0.0% |
| ROE | 17.1% | 14.3% | 16.3% | 17.2% | 17.5% | 0.3% |
| Net Debt/EBITDA | 0.6x | 0.0x | -0.4x | -0.7x | 0.1x | 0.8x |
Revenue and profitability
The company's Revenue increased on 6.2% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.3 pp from 28.4% to 29.7% in 2015.
Gross Margin increased slightly on 0.64 pp from 77.7% to 78.3% in 2015.
Net Income marign increased slightly on 1.4 pp from 21.5% to 22.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 1.9%. The company's CAPEX/Revenue increased slightly on 1.0 pp from 0.90% in 2012 to 1.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 1.6%.
Return on investment
The company operates at good ROE (17.53%) while ROIC is low (9.93%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 5.1x. Net Debt / EBITDA surged on 0.8x from -0.7x to 0.1x in 2015. Debt decreased on 3.0% in 2015 while cash dropped on 14.6% in 2015.
Appendix 1: Peers in Financial Services
Below you can find Schroders benchmarking vs. other companies in Financial Services 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 |
|---|
| First Property Group ($FPO) | | 31.4% | 13.9% | 69.7% | 2.6% |
| Afh Financial Group ($AFHP) | | | 49.9% | 39.3% | 39.5% |
| Fairpoint Group ($FRP) | -12.0% | 32.7% | -17.5% | 35.1% | |
| Commercial Bank Of Qatar(The) ($CBQS) | | 5.7% | 19.3% | 26.1% | -4.2% |
| Hargreaves Lansdown ($HL.) | | 14.8% | 22.5% | 22.6% | 10.3% |
| |
|---|
| Median (30 companies) | -2.1% | 5.6% | 12.6% | 5.2% | 3.0% |
|---|
| Schroders ($SDRC) | | -5.1% | 26.9% | 6.4% | 6.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Record ($REC) | 99.6% | 98.8% | 98.8% | 99.6% | 99.3% |
| Panmure Gordon & Co ($PMR) | 93.9% | 95.2% | 95.0% | 95.3% | |
| London Capital Group Hldgs ($LCG) | 64.7% | 64.2% | 70.5% | 73.6% | |
| Walker Crips Group ($WCW) | 74.5% | 71.8% | 58.0% | 68.2% | 66.7% |
| First Property Group ($FPO) | 85.2% | 86.0% | 69.5% | 67.9% | 83.0% |
| |
|---|
| Median (15 companies) | 48.9% | 51.8% | 52.2% | 51.3% | 44.3% |
|---|
| Schroders ($SDRC) | 75.8% | 76.9% | 76.2% | 77.7% | 78.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Livermore Investments Group Ltd ($LIV) | 92.1% | 84.9% | 64.8% | 78.8% | |
| Real Estate Credit Investments Pcc ($RECP) | | 58.6% | 89.3% | 77.0% | 80.3% |
| Efg Hermes Hldgs ($EFGD) | 67.0% | 66.0% | 61.4% | 63.1% | |
| Hargreaves Lansdown ($HL.) | 61.0% | 64.1% | 66.4% | 58.7% | 51.2% |
| Manx Financial Group ($MFX) | 24.2% | 39.8% | 49.2% | 56.5% | 58.8% |
| |
|---|
| Median (26 companies) | 15.5% | 11.7% | 15.6% | 14.4% | 17.3% |
|---|
| Schroders ($SDRC) | 27.0% | 25.0% | 25.2% | 28.4% | 29.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Daishin Securities Co ($DSS) | 2.8% | 6.0% | 24.7% | 15.0% | 6.5% |
| Efg Hermes Hldgs ($EFGD) | 4.9% | 5.6% | 4.4% | 6.0% | |
| Fulcrum Utility Services Ld ($FCRM) | | 5.4% | 5.0% | 3.7% | 0.1% |
| London Capital Group Hldgs ($LCG) | 5.7% | 1.8% | 0.2% | 3.4% | |
| Guinness Peat Group ($GPG) | 3.7% | 2.6% | 0.6% | 2.9% | 3.0% |
| |
|---|
| Median (29 companies) | 1.1% | 1.4% | 1.3% | 1.3% | 0.7% |
|---|
| Schroders ($SDRC) | 0.8% | 0.9% | 1.4% | 1.5% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hargreaves Lansdown ($HL.) | 133.9% | 108.7% | 111.7% | 101.0% | 87.5% |
| Manx Financial Group ($MFX) | -1.2% | 8.0% | 19.7% | 29.7% | 40.2% |
| Record ($REC) | 44.4% | 23.8% | 19.6% | 20.2% | 20.2% |
| S & U ($46IE) | | 17.6% | 19.1% | 19.7% | 13.9% |
| Fairpoint Group ($FRP) | -2.1% | 18.6% | 9.0% | 19.4% | |
| |
|---|
| Median (30 companies) | 5.4% | 5.2% | 6.0% | 8.9% | 11.8% |
|---|
| Schroders ($SDRC) | 11.7% | 7.6% | 9.4% | 10.0% | 9.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Private & Commercial Finance Group ($PCF) | 16.0x | 12.8x | 14.3x | 13.9x | 12.9x |
| Daishin Securities Co ($DSS) | 0.8x | 1.5x | 2.4x | 10.7x | 8.0x |
| First Property Group ($FPO) | 5.6x | 3.6x | 3.0x | 5.6x | 12.3x |
| Livermore Investments Group Ltd ($LIV) | 4.9x | 3.8x | 4.6x | 3.4x | |
| S & U ($46IE) | | 1.4x | 1.3x | 1.7x | 3.1x |
| |
|---|
| Median (26 companies) | -1.6x | -1.2x | -1.7x | -2.3x | -0.5x |
|---|
| Schroders ($SDRC) | 0.6x | 0.0x | -0.4x | -0.7x | 0.1x |
