Aviva revenue dropped on 45.7% in 2015

10 Mar 2016 • About Aviva ($AV.A) • By InTwits

Aviva reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Aviva is a company in decline: 2015 revenue growth was -45.7%, 5 years revenue CAGR was -14.1%
Aviva has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
The company has potentially unprofitable business model: ROIC is at 0.6%
It operates with high leverage: Net Debt/EBITDA is 3.1x while industry average is

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Aviva ($AV.A) key annual financial indicators

mln. £	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	30,842	43,401	34,526	43,350	23,548	-45.7%
Net Income	225	-3,102	2,008	1,569	918	-41.5%
Balance Sheet
Cash	23,043	23,102	26,131	23,105	33,676	45.8%
Short Term Debt	3,195	3,040	2,694	2,068	1,858	-10.2%
Long Term Debt	5,255	5,139	5,125	5,310	6,912	30.2%
Cash flow
Capex	86	220	30	116	58	-50.0%
Ratios
Revenue growth	-38.8%	40.7%	-20.4%	25.6%	-45.7%
Net Income Margin	0.7%	-7.1%	5.8%	3.6%	3.9%	0.3%
CAPEX, % of revenue	0.3%	0.5%	0.1%	0.3%	0.2%	-0.0%
ROIC	0.5%	0.4%	0.7%	1.0%	0.6%	-0.5%
ROE	1.3%	-30.6%	23.5%	16.3%	6.5%	-9.7%

Revenue and profitability

The company's Revenue dropped on 45.7% in 2015.

Net Income marign showed almost no change in 2015.

Capital expenditures (CAPEX) and working capital investments

In 2015 the company had CAPEX/Revenue of 0.25%. Aviva showed almost no change in CAPEX/Revenue from 2012 to 2015. For the last three years the average CAPEX/Revenue was 0.20%.

Return on investment

The company operates at low ROIC (0.59%) and ROE (6.55%). ROIC showed almost no change in 2015. ROE decreased on 9.7 pp from 16.3% to 6.5% in 2015.

Leverage (Debt)

Debt surged on 18.9% in 2015 while cash surged on 45.8% in 2015.

Appendix 1: Peers in Life Insurance

Below you can find Aviva 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.

Top companies by Revenue growth, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Shin Kong Financial Hldg Co ($SKFS)		2.2%	0.8%	21.5%	6.2%
Cathay Financial Hldg Co ($CFHS)	41.4%	-25.4%	58.9%	14.8%
Prudential ($PRU)		49.1%	-3.8%	14.8%	-31.3%
Standard Life ($SL.)		111.1%	-12.3%	-1.4%	-46.4%
Sagicor Financial Corp ($SFI)	-25.1%	12.7%	-2.3%	-2.8%
Median (6 companies)	8.1%	9.5%	-0.7%	6.7%	-13.6%
Aviva ($AV.A)		40.7%	-20.4%	25.6%	-45.7%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Sagicor Financial Corp ($SFI)	1.3%	1.9%	1.8%	2.1%
Torchmark Corp ($TMK)	0.2%	0.1%	0.3%	0.5%	1.0%
Shin Kong Financial Hldg Co ($SKFS)	0.2%	0.4%	0.3%	0.4%	0.8%
Prudential ($PRU)	0.3%	0.3%	0.4%	0.3%	0.6%
Cathay Financial Hldg Co ($CFHS)	0.2%	1.1%	0.3%	0.2%
Median (6 companies)	0.2%	0.3%	0.3%	0.3%	0.7%
Aviva ($AV.A)	0.3%	0.5%	0.1%	0.3%	0.2%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Torchmark Corp ($TMK)	5.5%	5.4%	4.9%	4.6%	4.3%
Cathay Financial Hldg Co ($CFHS)	0.5%	0.6%	0.9%	1.3%
Prudential ($PRU)	0.8%	1.1%	0.6%	0.8%	0.9%
Shin Kong Financial Hldg Co ($SKFS)	0.6%	0.8%	0.8%	0.7%	0.5%
Standard Life ($SL.)	0.5%	0.7%	0.5%	0.5%	0.4%
Median (6 companies)	0.6%	0.8%	0.8%	0.8%	0.7%
Aviva ($AV.A)	0.5%	0.4%	0.7%	1.0%	0.6%

Aviva stock price chart

Aviva financials

mln.	FY2010	FY2011	FY2012

Revenue	50,360	30,842	43,401
EBITDA	0.000	0.000	0.000
Net income	1,463	225.0	-3,102.000
CAPEX	161.0	86.000	220.0
Debt	14,949	8,450	8,179
Cash	25,455	23,043	23,102

About Aviva

Aviva plc provides long-term insurance and savings, general and health insurance, and fund management products and services worldwide. The company offers insurance and savings products, including pensions products, such as personal and group pensions, stakeholder pensions, and income drawdown; annuities; protection products comprising term assurance, mortgage life insurance, flexible whole life, and critical illness cover; bonds and savings consisting of single premium investment bonds and regular premium savings plans; and investment products, including unit trusts, individual savings accounts, and open ended investment companies, as well as equity release services. It also provides general and health insurance products, including personal lines of insurance products comprising motor, household, travel, and creditor insurance; commercial lines of insurance products consisting of fleet, liability, and commercial property insurance; health insurance products, including private health, income protection, and personal accident products, as well as various corporate healthcare insurance products; and insurance for corporate and specialty risks. In addition, the company offers fund management products and services to its long-term insurance and savings, and general insurance operations, as well as to third party investors. It sells its products through a range of distribution channels, including direct sales force, intermediaries, corporate partnerships, bancassurance, and joint ventures, as well as through the telephone and Internet. The company was formerly known as CGNU plc and changed its name to Aviva plc in July 2002. Aviva plc was incorporated in 1990 and is headquartered in London, the United Kingdom.