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Viscofan Company Valuation

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by

Fran López Ballero

on 7 February 2016

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Transcript of Viscofan Company Valuation

The Value of..
Carlos Acitores
Daniel Cuadra
Fernando Malpartida
Fran López Ballero
Presents
Market Evolution
Market by Regions
What about Leverage?
2012 vs 2011
2012 vs 2011
Providing Cash Flows
ShareHolders Remuneration... looking good
Drivers for an accelerated Growth
Revenue Growth
Investment to capture the Growth of the market
Focus on Growth, but keeping discipline in Costs
EBITDA
Returns well above Capital Expenditures
CAGR = 8,9%
The market is consistently growing above the historical high-end range
Growth in emerging countries … but also in developed ones
Assumptions
Valuation Methods
DCF
APV
DDM
CF to Eq
DCF
Uses WACC
Assumes value of E is correct & not a dynamic E
Same capital structure and tax applies to all corporate actions
Other...
BUT...
No so simple tax adjustment to Cost of Debt
Easy to mis-estimate WACC
APV
Good when
Complex Capital Structure
BUT...
Requires EXPERIENCE
Wrong underlying Assumptions = Wrong Projections
Wrong Assumptions or discount rate 9/10
Wrong perpetuity Growth Rate
... and Viscofan does not change Tax position/rate
DDM
Good when
Companies or projects where dividends tend to be
similar to CFtoEq (highways, energy projects)
Non-controlled subsidiaries
Captures the value of the cash received by a non-controlling stockholder
BUT it does not apply to Viscofan
CF to Eq
Good when
S&S Dividend policy
Dividends are important, it is the cash received by SHs
Stated to the stockholders &
remain Stable in the medium term
Viscofan pays a stable 45% pay-back since 2005
It does apply to Viscofan
Viscofan Valuation
Number of Shares x Share Price* = Eq Value

Share Price* = Eq Value / Number of Shares

Share Price* = 1.766.826.000 / 46.603.682 = 39,91€
Final Conclusion
Maintain Position - Viscofan
Quote Price 39,78 39,91 Share Price
Full transcript