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Description
Financial Market Outlook 2008 document sample
Document Sample
All figures in: NOK March 2000
Presentation of
Market Cap in MNOK: 149
XXX
Expected return: MEDIUM
Risk: LOW
Overview Key Financial Figures 2007 2008 2009
Operating Revenues 52.4 80.2 101.7
Market Material Cost - - -
Wages & Salaries 44.5 69.9 89.2
Other Operating Expenses 4.8 6.9 7.9
Outlook & Valuation Ordinary Depreciations 0.2 0.9 1.4
Operating Result (EBIT) 2.9 2.5 3.2
Net Financial Result 2.2 3.5 1.1
Amortisation & Write Downs - - -
Pre-tax Result 2.7 2.0 3.1
Tax 0.8 0.6 0.8
Associated Companies - - -
Result for the Year 1.9 1.4 2.3
Equity incl. Minority Int. 2.0 3.1 11.9
Int. bearing Short-term Debt 2.7 1.3 -
Trade Creditors, Tax, etc 9.4 13.8 15.4
Pension Obligations - - -
Long-term Liabilities 10.0 0.5 -
Total Liabil. and Equity 24.1 18.7 27.3
Intangible Assets - 0.5 0.6
Capital Assets 0.7 2.5 2.3
Cash and Bank Deposits 0.8 2.4 6.3
Trade Receivables 12.6 13.2 17.9
Inventories - - -
Other Current Assets - 0.1 0.2
Total Assets 14.1 18.7 27.3
120 6%
100 5%
Operating margin
Sales in mill (bar)
80 4%
60 3%
40 2%
20 1%
0 0%
2007 2008 2009
Last year figures only
30
25
20
15
10
5
0
P/S EV/EBITDA P/E P/BV
Major Shareholders
ABC 66%
DEF 34% Private Equity Fund
> Growth in Oper. Income *** 138% 53% 27% 35% 30% 25% 20% 15% 10% 5% 5% 5% 5%
> Synergy by Cross-selling *** *** *** *** 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
> Material Cost of Sales 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
> Reduction in CoGS by Synergy 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
> Salaries & Wages of Sales 89% 85% 87% 88% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85%
> Reduction in SG&A by Synergy *** *** *** *** 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
> EBIT-margin 3% 6% 3% 3% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
> Growth in Oper. Result n/a 383% -14% 28% 151% 30% 25% 20% 15% 10% 5% 5% 5% 5%
> Tax Rate 0% 42% 43% 35% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28%
> Working Capital of Sales 10% 8% 2% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9%
*** *** *** ***
Investments 0.1 0.2 0.9 1.4 1.9 2.5 3.1 3.7 4.2 4.7 4.9 5.1 5.4 5.7
Increase in Working Capital *** 2.3 0.6 1.9 3.2 3.7 4.0 4.0 3.6 2.8 1.5 1.6 1.7 1.8
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Operating Revenues 22.0 52.4 80.2 101.7 137.3 178.5 223.1 267.7 307.9 338.7 355.6 373.4 392.1 411.7
Material Cost 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Wages & Salaries 19.5 44.5 69.9 89.2 116.7 151.7 189.6 227.6 261.7 287.9 302.3 317.4 333.2 349.9
Other Operating Expenses 1.8 4.8 6.9 7.9 10.7 13.9 17.3 20.8 23.9 26.3 27.6 29.0 30.5 32.0
Ordinary Depreciations 0.1 0.2 0.9 1.4 1.9 2.5 3.1 3.7 4.2 4.7 4.9 5.1 5.4 5.7
Total Operating Expenses 21.4 49.5 77.7 98.5 129.3 168.0 210.0 252.0 289.9 318.8 334.8 351.5 369.1 387.6
Operating Result (EBIT) 0.6 2.9 2.5 3.2 8.0 10.5 13.1 15.7 18.0 19.8 20.8 21.9 23.0 24.1
Financial Income 1.0 2.0 3.0 1.0 2.0 3.0 1.0 2.0 3.0 1.0 2.0 3.0 1.0 2.0
Financial Expenses -0.2 -0.2 -0.5 -0.1 1.0 2.0 3.0 3.0 3.0 4.0 4.0 4.0 5.0 5.0
Net Financial Result 1.2 2.2 3.5 1.1 1.0 1.0 -2.0 -1.0 0.0 -3.0 -2.0 -1.0 -4.0 -3.0
Amortisation & Write Downs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Pre-tax Result 0.4 2.7 2.0 3.1 9.0 12.5 16.1 18.7 21.0 23.8 24.8 25.9 28.0 29.1
Tax 0.0 0.8 0.6 0.8 2.5 3.5 4.5 5.2 5.9 6.7 7.0 7.2 7.8 8.1
Associated Companies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Result for the Year 0.4 1.9 1.4 2.3 6.5 9.0 11.6 13.4 15.1 17.2 17.9 18.6 20.1 21.0
Economic Value Added -0.3 0.7 1.3 1.2
Equity incl. Minority Int. 0.4 2.0 3.1 11.9
Int. bearing Short-term Debt 2.0 2.7 1.3 0.0
Trade Creditors, Tax, etc 2.2 9.4 13.8 15.4
Pension Obligations 0.0 0.0 0.0 0.0
Long-term Liabilities 5.0 10.0 0.5 0.0
Total Liabil. and Equity 9.6 24.1 18.7 27.3
Intangible Assets 0.0 0.0 0.5 0.6
Capital Assets 0.2 0.7 2.5 2.3
Cash and Bank Deposits 0.4 0.8 2.4 6.3
Trade Receivables 4.0 12.6 13.2 17.9
Inventories 0.0 0.0 0.0 0.0
Other Current Assets 0.0 0.0 0.1 0.2
Total Assets 4.6 14.1 18.7 27.3
Cash Flow Operations 3.1 3.4 4.6
Cash Flow Working Capital 4.0 1.8 8.8
Cash Flow Investment and Debt -4.6 -14.8 -11.1
Cash Flow Finance -0.2 -0.5 -0.1
Net Cash Flow 9.5 4.6 8.6
Cash and Bank Deposits 01.01 4.6 14.1 18.7
Cash and Bank Deposits 31.12 14.1 18.7 27.3
Indication of Value based on Free
CASH FLOW TO TOTAL CAPITAL
Value based on Free Cash Flow to Total Capital less Interest Bearing Debt: 149 13.9 Required compounded growth in earnings
over number of years: 10 19.6 %
Risk Free Interest: 4.0 % Equity-beta: 1.80 2 0.1000
Risk Premium: 4.5 % Equity Share: 46% Residual in percent of total value 68.0 %
Interest on Debt: 10.0 % Est. Growth after 10 Years: 2.5 % Disc. cash flow of total value 36.4 %
WACC: 9.43% Tax Rate: 28% Net Debt in percent of total value -4.4 %
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Net Interest Bearing Debt 7 *** *** *** *** *** *** *** *** ***
Operating Income 137 178 223 268 308 339 356 373 392 412
Operating Result 8 10 13 16 18 20 21 22 23 24 24
- Tax on Operating Result 2 3 4 4 5 6 6 6 6 7 7
+ Deprecations 2 2 3 4 4 5 5 5 5 6
- Investments 2 2 3 4 4 5 5 5 5 6
- Incr. in Working Capital 3 4 4 4 4 3 2 2 2 2
= Cash Surplus 3 4 5 7 9 12 13 14 15 16 17
Discouning Factor 1.09 1.20 1.31 1.43 1.57 1.72 1.88 2.06 2.25 2.46 2.46
Discounted Value 2 3 4 5 6 7 7 7 7 6 102
EBIT-margin 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
Margin on Material Cost
450 100% 100% 100% 100% 100% 100% 100% 100% 100%
20% 100%
400 18%
EBIT-margin (whole line)
and Material Contribution
16%
Operating Income (bar)
350
300 14%
12%
250
10%
200
8%
150 6%
100 4%
50 2%
0 0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2.462759113 1.28008454 = 0
2.462759113 6.9 %
+
0 102.5 % = 0
2.462759113 6.9 %
= 0
Indication of Value based on 35 Senario A Senario B Senario C Senario D
STRATEGIC ASSESSMENTS 30
25
Value arrising from established Probabilities based on Strategic Assessments: 27.1 2.2 20
15
Risk Free Interest: 4.00% Equity-beta, 85% Equity: 1.8 10
Risk Premium: 4.50% Est. Growth 10-25 Years: 0.5 5
Interest on Debt: 10.00% Est. Growth after 25 Years: 0.0 0
WACC: 9.43% Tax Rate: 0.3 -5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Curret Result: -0.4
Estimates in USD billions, 10 yrs from now
Probability: 5% US books US music Other Total
A Amazon becomes a "new economy" Wal- EBITDA-margin: 14%
Mart, with sustained growth and profitability Result in 10 years: 11.9 24 13 48 85
with a low capital base DCF-value: 70.7 15% 18%
Probability: 35%
B Amazon dominated its growing category, EBITDA-margin: 11%
but ecomomics closer to traditional retailers Result in 10 years: 6.6 20 9 31 60
DCF-value: 39.2 13% 12%
Probability: 45%
C Amazon retains its commanding competitive EBITDA-margin: 8%
lead and becomes a large retailer, but returns are Result in 10 years: 3.3 16 6 19 41
like trditional retailers DCF-value: 19.5 15% 18%
#VALUE! #DIV/0! 0%
Probability: 15% #DIV/0!
D Intence competition transfers most value to EBITDA-margin: 7%
the consumers; Amazon is a medium-sized Result in 10 years: 1.2 7 5 5 17
retailer with modest retailer ecomomics DCF-value: 7.1 5% 6%
Customer Value based on Value Creation Percentages are estimated market shares (information only)
Annual Revenue per Customer: 342
Contribution Margin: 15%
Churn (fall out) Rate: 46%
Acqusition Cost 93
Customer Net Present Value: -1
Senario A 1 2 3 4 5 6 7 8 9 10 11 12
Result -0.4 -1.8 -1.2 1.2 2.5 3.7 4.9 6.2 7.4 8.6 11.9 13.3
Discouning Factor 1.14 1.30 1.48 1.69 1.93 2.20 2.50 2.86 3.26 3.71 4.23 4.82
Discounted Value -0 -1 -1 1 1 2 2 2 2 2 3 3
Senario B 1 2 3 4 5 6 7 8 9 10 11 12
Result -0.4 -1.1 -0.7 0.7 1.4 2.1 2.8 3.5 4.2 4.9 6.6 7.4
Discouning Factor 1.14 1.30 1.48 1.69 1.93 2.20 2.50 2.86 3.26 3.71 4.23 4.82
Discounted Value -0 -1 -0 0 1 1 1 1 1 1 2 2
Senario C 1 2 3 4 5 6 7 8 9 10 11 12
Result -0.4 -0.6 -0.4 0.4 0.7 1.1 1.5 1.8 2.2 2.6 3.3 3.7
Discouning Factor 1.14 1.30 1.48 1.69 1.93 2.20 2.50 2.86 3.26 3.71 4.23 4.82
Discounted Value -0 -0 -0 0 0 1 1 1 1 1 1 1
Senario D 1 2 3 4 5 6 7 8 9 10 11 12
Result -0.4 -0.2 -0.2 0.2 0.3 0.5 0.6 0.8 1.0 1.1 1.2 1.3
Discouning Factor 1.14 1.30 1.48 1.69 1.93 2.20 2.50 2.86 3.26 3.71 4.23 4.82
Discounted Value -0 -0 -0 0 0 0 0 0 0 0 0 0
13 14 15 16 17 18 19 20 21 22 23 24 25
14.9 16.7 18.7 21.0 23.5 26.3 29.5 33.0 37.0 41.4 46.4 51.9 58.2
5.50 6.27 7.15 8.15 9.29 10.60 12.08 13.77 15.70 17.90 20.41 23.27 2.26
3 3 3 3 3 2 2 2 2 2 2 2 26
13 14 15 16 17 18 19 20 21 22 23 24 25
8.3 9.3 10.4 11.6 13.0 14.6 16.3 18.3 20.5 23.0 25.7 28.8 32.3
5.50 6.27 7.15 8.15 9.29 10.60 12.08 13.77 15.70 17.90 20.41 23.27 2.26
2 1 1 1 1 1 1 1 1 1 1 1 14
13 14 15 16 17 18 19 20 21 22 23 24 25
4.1 4.6 5.2 5.8 6.5 7.3 8.1 9.1 10.2 11.4 12.8 14.3 16.0
5.50 6.27 7.15 8.15 9.29 10.60 12.08 13.77 15.70 17.90 20.41 23.27 2.26
1 1 1 1 1 1 1 1 1 1 1 1 7
13 14 15 16 17 18 19 20 21 22 23 24 25
1.5 1.7 1.9 2.1 2.3 2.6 2.9 3.3 3.7 4.1 4.6 5.2 5.8
5.50 6.27 7.15 8.15 9.29 10.60 12.08 13.77 15.70 17.90 20.41 23.27 2.26
0 0 0 0 0 0 0 0 0 0 0 0 3
Growth and Cost Reductions to
Justify "Fair Value"
14.95 10.00
Enterprise Value in MEUR: 160 The estimate is done on the basis of no
EBITDA in MEUR: 10.7 net debt and a typical working capital
Required Return on Capital: 10.0 %
Horizon in Years: 7
14.95327103 14.49827862 14.0432862 13.58829379 13.13330138 12.67830896 12.22331655
0 4.9 9.7 14.6 19.5 24.3 29.2
Annual EBITDA Cost Reductions in MEUR
0 1 2 3 4 5 6
Required Annual Growth in EBITDA
6% 5% 5% 4% 4% 3% 3%
Annual Growth Required to Justify Fair
7%
6%
5%
4%
Value
3%
2%
1%
0%
0 1 2 3 4 5 6
MEUR in Cost Reduction per Year
Industry / trade 1,2
Indication of Value, using Technology 2,1
REAL OPTIONS Telecom, etc 3,1
Probablilty of success 25% Industry standard diviation: 1.2
1.20 1.44 1.73 2.07 2.49 2.99
Year 1 2 3 4 5 6
Cash flow -10 -30 135 105 75 45
Value estimate R&D / Project 46 63 166 94 38 -
Remaining Value of R&D or Project
180
160
140
120
100
80
60
40
20
0
1 2 3 4 5 6
Major Shareholders Per cent Shares Note
ABC 66.25%
DEF 33.75% Private Equity Fund
Above Shareholders 100%
Formel for beregning
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