MATLAB-file s-functions are interpreted by the MATLAB engine. Core blocks are compiled.
As said on wikipedia:
"The main disadvantage of interpreting is a much slower speed of program execution"
If you want to write MATLAB code that runs fast, you can use the MATLAB Function Block (previously called Embedded MATLAB Function block). Or you also have the option to write a C-Mex s-function.
I wrote posts about including MATLAB code in a simulation:
and about speeding up a simulation:
