Beazley reports 47.5% Net Income decline in 2018
07 Feb 2019 • About Beazley (
$BEZ) • By InTwits
Beazley reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Beazley has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- The company has potentially unprofitable business model: ROIC is 1.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.7x while industry average is 1.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 5.7%.
Net Income margin decreased on 3.2 pp from 6.4% to 3.2% in 2018. During the last 5 years Net Income margin topped in 2015 at 13.9% and was declining since that time.
Investments (CAPEX, working capital and M&A)
Beazley's CAPEX/Revenue was 0.12% in 2018. Beazley showed almost no change in CAPEX/Revenue from 2015 to 2018. For the last three years the average CAPEX/Revenue was 0.12%.
Return on investment
The company operates at low ROIC (1.5%) and ROE (4.6%). ROIC decreased slightly on 1.3 pp from 2.8% to 1.5% in 2018. ROE decreased on 4.1 pp from 8.7% to 4.6% in 2018. During 2014-2018 ROIC topped in 2016 at 4.8% and was declining since that time. During the last 5 years ROE topped in 2015 at 17.9% and was declining since that time.
Leverage (Debt)
Debt decreased on 5.9% while cash dropped on 23.7%.
The company has no short term refinancing risk: short term debt is zero.
Management team
David Andrew Horton is a Beazley's CEO. David Andrew Horton is a founder and has spent 3 years with the company.
Financial and operational results
FY ended 31 Dec 2018
Beazley ($BEZ) key annual financial indicators| mln. | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1,769 | 1,787 | 1,894 | 2,043 | 2,159 | 5.7% |
| Net Income | 218 | 249 | 251 | 130 | 68 | -47.5% |
Balance Sheet
|
|---|
| Cash | 364 | 677 | 507 | 441 | 336 | -23.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 257 | 247 | 364 | 366 | 344 | -5.9% |
Cash flow
|
|---|
| Capex | 0 | 3 | 3 | 2 | 3 | 52.9% |
Ratios
|
|---|
| Revenue growth | 5.9% | 1.1% | 6.0% | 7.9% | 5.7% | |
|
|---|
| Net Income Margin | 12.3% | 13.9% | 13.3% | 6.4% | 3.2% | -3.2% |
| CAPEX, % of revenue | 0.0% | 0.1% | 0.2% | 0.1% | 0.1% | 0.0% |
|
|---|
| ROIC | 4.5% | 4.8% | 4.8% | 2.8% | 1.5% | -1.3% |
| ROE | 16.2% | 17.9% | 17.2% | 8.7% | 4.6% | -4.1% |
Peers in Nonlife Insurance
Below you can find Beazley benchmarking vs. other companies in Nonlife 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Randall & Quilter Invt Hldgs Ltd ($RQIH) | 20.7% | 10.0% | 22.1% | 110.7% | |
| Helios Underwriting ($HUW) | 47.9% | 12.8% | 54.8% | 18.4% | |
| Marsh & Mclennan Cos Inc ($MHM) | | -0.4% | 2.5% | 6.2% | 6.6% |
| F.B.D.Hldgs ($FBH) | 1.1% | 0.8% | -6.5% | 5.8% | |
| Rsa Insurance Group ($RSAB) | | -17.2% | 2.6% | 3.4% | |
| |
|---|
| Median (8 companies) | 21.4% | -0.4% | 2.5% | 4.6% | 6.6% |
|---|
| Beazley ($BEZ) | | 1.1% | 6.0% | 7.9% | 5.7% |
Top companies by EBITDA margin, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Marsh & Mclennan Cos Inc ($MHM) | 20.8% | 22.0% | 23.5% | 23.8% | 21.8% |
| |
|---|
| Median (1 company) | 20.8% | 22.0% | 23.5% | 23.8% | 21.8% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F.B.D.Hldgs ($FBH) | 7.0% | 5.2% | 3.7% | 2.3% | |
| Marsh & Mclennan Cos Inc ($MHM) | 2.8% | 2.5% | 1.9% | 2.2% | 2.1% |
| Arab Insurance Group(Arig) ($AGRD) | 0.2% | 0.3% | 0.2% | 0.3% | |
| Randall & Quilter Invt Hldgs Ltd ($RQIH) | 1.1% | 0.3% | 3.5% | 0.3% | |
| Rsa Insurance Group ($RSAB) | 0.5% | 0.2% | 0.4% | 0.3% | |
| |
|---|
| Median (8 companies) | 0.5% | 0.2% | 0.3% | 0.3% | 2.1% |
|---|
| Beazley ($BEZ) | 0.0% | 0.1% | 0.2% | 0.1% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Marsh & Mclennan Cos Inc ($MHM) | 21.0% | 22.0% | 23.6% | 23.3% | 20.5% |
| F.B.D.Hldgs ($FBH) | 0.2% | -9.0% | 0.9% | 4.5% | |
| Rsa Insurance Group ($RSAB) | -0.1% | 1.2% | 2.7% | 2.8% | |
| Randall & Quilter Invt Hldgs Ltd ($RQIH) | -3.4% | -2.1% | 1.7% | 1.7% | |
| Arab Insurance Group(Arig) ($AGRD) | 1.2% | -0.7% | 1.1% | 0.9% | |
| |
|---|
| Median (8 companies) | 1.0% | 0.6% | 1.4% | 1.3% | 20.5% |
|---|
| Beazley ($BEZ) | 4.5% | 4.8% | 4.8% | 2.8% | 1.5% |
Top companies by Net Debt / EBITDA
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Marsh & Mclennan Cos Inc ($MHM) | 0.5x | 1.1x | 1.2x | 1.3x | 1.5x |
| |
|---|
| Median (1 company) | 0.5x | 1.1x | 1.2x | 1.3x | 1.5x |
|---|
