Aviva reports 134% revenue growth in FY2016

09 Mar 2017 • About Aviva ($AV.A) • By InTwits

Aviva reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Aviva doesn't have a profitable business model yet: FY2016 ROIC is 0.4%
Aviva has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.2%.
The company has potentially unprofitable business model: ROIC is at 0.4%
It operates with high leverage: Net Debt/EBITDA is 1.7x 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. £	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	43,401	34,526	43,350	23,548	55,076	133.9%
Net Income	-3,102	2,008	1,569	918	703	-23.4%
Balance Sheet
Cash	23,102	26,131	23,105	33,676	38,708	14.9%
Short Term Debt	3,040	2,694	2,068	1,858	1,718	-7.5%
Long Term Debt	5,139	5,125	5,310	6,912	8,577	24.1%
Cash flow
Capex	220	30	116	58	67	15.5%
Ratios
Revenue growth	40.7%	-20.4%	25.6%	-45.7%	133.9%
Net Income Margin	-7.1%	5.8%	3.6%	3.9%	1.3%	-2.6%
CAPEX, % of revenue	0.5%	0.1%	0.3%	0.2%	0.1%	-0.1%
ROIC	0.4%	0.7%	1.0%	0.6%	0.4%	-0.2%
ROE	-30.6%	23.5%	16.3%	6.5%	4.6%	-1.9%

Revenue and profitability

Aviva's Revenue surged on 134% in FY2016.

Net Income marign decreased on 2.6 pp from 3.9% to 1.3% in FY2016.

Capital expenditures (CAPEX) and working capital investments

In FY2016 Aviva had CAPEX/Revenue of 0.12%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 0.21%.

Return on investment

The company operates at low ROIC (0.43%) and ROE (4.63%). ROIC showed almost no change in FY2016. ROE decreased slightly on 1.9 pp from 6.5% to 4.6% in FY2016.

Leverage (Debt)

Debt surged on 17.4% in FY2016 while cash surged on 14.9% in FY2016.

Appendix 1: Peers in Life Insurance

Below we provide Aviva benchmarking against other companies in Life Insurance 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
Cathay Financial Hldg Co ($CFHS)	-25.4%	58.9%	14.8%	9.3%
Sagicor Financial Corp ($SFI)	12.7%	-2.3%	-2.8%	7.5%
Shin Kong Financial Hldg Co ($SKFS)		0.8%	21.5%	6.2%	10.4%
Torchmark Corp ($TMK)		5.1%	-4.0%	4.0%	4.5%
Prudential ($PRU)	49.1%	-3.8%	14.8%	-31.3%
Median (7 companies)	21.3%	-2.3%	14.8%	4.0%	10.4%
Aviva ($AV.A)		-20.4%	25.6%	-45.7%	133.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Sagicor Financial Corp ($SFI)	1.9%	1.8%	2.1%	1.6%
Torchmark Corp ($TMK)	0.1%	0.3%	0.5%	1.0%	0.6%
Shin Kong Financial Hldg Co ($SKFS)	0.4%	0.3%	0.4%	0.8%	0.4%
Prudential ($PRU)	0.3%	0.4%	0.3%	0.6%
Cathay Financial Hldg Co ($CFHS)	1.1%	0.3%	0.2%	0.2%
Median (7 companies)	0.4%	0.3%	0.3%	0.6%	0.4%
Aviva ($AV.A)	0.5%	0.1%	0.3%	0.2%	0.1%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Torchmark Corp ($TMK)	5.4%	4.9%	4.6%	4.3%	4.2%
Cathay Financial Hldg Co ($CFHS)	0.6%	0.9%	1.3%	1.3%
Prudential ($PRU)	1.1%	0.6%	0.8%	0.9%
Shin Kong Financial Hldg Co ($SKFS)	0.8%	0.8%	0.7%	0.5%	0.4%
Standard Life ($SL.)	0.7%	0.5%	0.5%	0.4%	0.5%
Median (7 companies)	0.9%	0.9%	0.7%	0.7%	0.5%
Aviva ($AV.A)	0.4%	0.7%	1.0%	0.6%	0.4%

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.