Schroders EBITDA increased on 6.4% in 2016 and EBITDA Margin showed almost no change
02 Mar 2017 • About Schroders (
$SDRC) • By InTwits
Schroders reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Schroders has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 3.2%.
- CAPEX is quite volatile: 65.2 in 2016, 38.8 in 2015, 29.5 in 2014, 25.8 in 2013, 12.8 in 2012
- The company has business model with low profitability: ROIC is at 9.4%
- It operates with high leverage: Net Debt/EBITDA is 0.8x while industry average is -3.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Schroders ($SDRC) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,425 | 1,809 | 1,924 | 2,043 | 2,145 | 5.0% |
| Gross Profit | 1,096 | 1,378 | 1,495 | 1,601 | 1,713 | 7.0% |
| EBITDA | 356 | 456 | 546 | 606 | 645 | 6.4% |
| Net Income | 283 | 353 | 413 | 467 | 490 | 4.9% |
Balance Sheet
|
|---|
| Cash | 2,543 | 2,534 | 3,535 | 3,019 | 3,319 | 9.9% |
| Short Term Debt | 2,217 | 2,099 | 2,982 | 2,887 | 3,766 | 30.5% |
| Long Term Debt | 342 | 238 | 187 | 187 | 68 | -63.6% |
Cash flow
|
|---|
| Capex | 13 | 26 | 30 | 39 | 65 | 68.0% |
Ratios
|
|---|
| Revenue growth | -5.1% | 26.9% | 6.4% | 6.2% | 5.0% | |
| EBITDA growth | -12.2% | 28.1% | 19.8% | 11.1% | 6.4% | |
| Gross Margin | 76.9% | 76.2% | 77.7% | 78.3% | 79.9% | 1.5% |
| EBITDA Margin | 25.0% | 25.2% | 28.4% | 29.7% | 30.1% | 0.4% |
| Net Income Margin | 19.9% | 19.5% | 21.5% | 22.9% | 22.9% | -0.0% |
| CAPEX, % of revenue | 0.9% | 1.4% | 1.5% | 1.9% | 3.0% | 1.1% |
| ROIC | 7.6% | 9.4% | 10.0% | 9.9% | 9.4% | -0.5% |
| ROE | 14.3% | 16.3% | 17.2% | 17.5% | 16.5% | -1.0% |
| Net Debt/EBITDA | 0.0x | -0.4x | -0.7x | 0.1x | 0.8x | 0.7x |
Revenue and profitability
Schroders's Revenue increased on 5.0% in 2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 40.2 pp from 12.9% to -27.3% in FY2016.
Gross Margin increased slightly on 1.5 pp from 78.3% to 79.9% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Schroders had CAPEX/Revenue of 3.0%. CAPEX/Revenue increased slightly on 1.6 pp from 1.4% in 2013 to 3.0% in 2016. Average CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at good ROE (16.52%) while ROIC is low (9.40%). ROIC decreased slightly on 0.53 pp from 9.9% to 9.4% in 2016. ROE decreased slightly on 1.0 pp from 17.5% to 16.5% in 2016.
Leverage (Debt)
Debt level is 0.8x Net Debt / EBITDA and 5.9x Debt / EBITDA. Net Debt / EBITDA surged on 0.7x from 0.1x to 0.8x in 2016. Debt jumped on 24.7% in 2016 while cash increased on 9.9% in 2016.
Appendix 1: Peers in Financial Services
Below we provide Schroders benchmarking against other companies in Financial Services 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Volvere ($VLE) | -47.1% | 149.8% | -23.2% | 124.9% | |
| Real Estate Credit Investments Pcc ($RECP) | | 335.8% | -59.6% | 47.3% | -29.8% |
| Fairpoint Group ($FRP) | 32.7% | -17.5% | 35.1% | 41.2% | |
| Afh Financial Group ($AFHP) | | 49.9% | 39.3% | 39.5% | 15.0% |
| Manx Financial Group ($MFX) | 5.6% | 33.3% | 22.0% | 28.2% | |
| |
|---|
| Median (30 companies) | 5.6% | 12.6% | 5.2% | 2.7% | 1.7% |
|---|
| Schroders ($SDRC) | | 26.9% | 6.4% | 6.2% | 5.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Record ($REC) | 98.8% | 98.8% | 99.6% | 99.3% | 99.0% |
| Panmure Gordon & Co ($PMR) | 95.2% | 95.0% | 95.3% | 95.2% | |
| First Property Group ($FPO) | 86.0% | 69.5% | 67.9% | 83.0% | 80.6% |
| London Capital Group Hldgs ($LCG) | 64.2% | 70.5% | 73.6% | 67.9% | |
| Walker Crips Group ($WCW) | 71.8% | 58.0% | 68.2% | 66.7% | 67.7% |
| |
|---|
| Median (15 companies) | 51.8% | 52.2% | 51.3% | 52.3% | 47.1% |
|---|
| Schroders ($SDRC) | 76.9% | 76.2% | 77.7% | 78.3% | 79.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Livermore Investments Group Ltd ($LIV) | 84.9% | 64.8% | 78.8% | 83.5% | |
| Real Estate Credit Investments Pcc ($RECP) | 58.6% | 89.3% | 77.0% | 80.3% | 79.3% |
| Manx Financial Group ($MFX) | 39.8% | 49.2% | 56.5% | 58.8% | |
| Hargreaves Lansdown ($HL.) | 64.1% | 66.4% | 58.7% | 51.2% | 57.5% |
| Daishin Securities Co ($DSS) | 53.8% | 51.5% | 38.8% | 49.2% | 38.9% |
| |
|---|
| Median (28 companies) | 11.7% | 15.6% | 14.4% | 15.9% | 15.5% |
|---|
| Schroders ($SDRC) | 25.0% | 25.2% | 28.4% | 29.7% | 30.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| London Capital Group Hldgs ($LCG) | 1.8% | 0.2% | 3.4% | 7.7% | |
| Daishin Securities Co ($DSS) | 6.0% | 24.7% | 15.0% | 6.5% | 15.1% |
| Commercial Bank Of Qatar(The) ($CBQS) | 6.0% | 3.8% | 2.8% | 3.9% | 3.3% |
| Nmbz Hldgs ($NMB) | 6.1% | 3.0% | 2.1% | 3.8% | |
| Afh Financial Group ($AFHP) | 1.6% | 1.5% | 0.7% | 3.8% | 1.8% |
| |
|---|
| Median (29 companies) | 1.4% | 1.3% | 1.3% | 0.9% | 1.5% |
|---|
| Schroders ($SDRC) | 0.9% | 1.4% | 1.5% | 1.9% | 3.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hargreaves Lansdown ($HL.) | 108.7% | 111.7% | 101.0% | 87.5% | 90.0% |
| Manx Financial Group ($MFX) | 8.0% | 19.7% | 29.7% | 40.2% | |
| Record ($REC) | 23.8% | 19.6% | 20.2% | 20.2% | 18.5% |
| Impax Asset Management Group ($IPX) | -13.7% | 17.2% | 18.7% | 16.1% | 15.0% |
| Lighthouse Group ($LGT) | 7.2% | -3.9% | 8.6% | 14.6% | 25.7% |
| |
|---|
| Median (30 companies) | 5.2% | 6.0% | 8.9% | 7.3% | 9.9% |
|---|
| Schroders ($SDRC) | 7.6% | 9.4% | 10.0% | 9.9% | 9.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Private & Commercial Finance Group ($PCF) | 12.8x | 14.3x | 13.9x | 12.9x | 10.6x |
| First Property Group ($FPO) | 3.6x | 3.0x | 5.6x | 12.3x | 9.4x |
| Canaccord Genuity Group Inc ($CF.) | | | | 10.2x | |
| Daishin Securities Co ($DSS) | 1.5x | 2.4x | 10.7x | 8.0x | 13.4x |
| S & U ($46IE) | 1.4x | 1.3x | 1.7x | 3.1x | 0.5x |
| |
|---|
| Median (25 companies) | -1.2x | -1.7x | -2.3x | -1.1x | -0.5x |
|---|
| Schroders ($SDRC) | 0.0x | -0.4x | -0.7x | 0.1x | 0.8x |
