Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

PRESENTATION

iValue
by

Luca Migliorati

on 2 August 2015

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of PRESENTATION

A.C. Milan Initial Public Offering

Widely used multiples do not work
For each one of the competitors we gathered data from Bloomberg, Orbis and Factiva.
Considering a time span of seven years, from 2006 to 2012, we therefore computed their specific annual multiple.
Our Multiple
Conclusion
Main issues
Our approach
SALES x (1+g)
Our main goal was to get to a forward ratio, so we took Sales from 2006 to 2012 without estimating g because we used their actual growth rate

Sales of 2012 were multiplied for the (1+CAGR), where the CAGR was calculated on the previous 6 years of data
LEVERAGE
Fading period & specific weights
Montecarlo
RELATIVE
ABSOLUTE
Valuing firms with negative earnings
Earnings growth rate is difficult to estimate

Financial structure

Is it a sustainable business model?
Relative valuation

Range estimation
Our results
Computed as a percentage of liabilities on the total sum of liabilities and equity




We used this in order to find the average financial structure of the industry


Created to forget past data giving more importance to recent values
λ calibrated to 0.9
The result is an average that fades to the 81% in 2011, 72.9% in 2010..
Weights were fixed subjectively trying to take into account particular characteristics of the comparables
iValue
EV/Ebitda

EV/Ebit

EV/Sales
EV/Sales could provide a consistent result, BUT:

Sales are too general as an indicator of profitability

No financial structure taken into account

No cost & amortization related to industry specific accounts
This is an example of how we applied the simulation on each single specific part of sales that we tried to explicitly forecast over the future four years
Estimating sales trend
We supposed the sales to moving according to a Log Random Walk under a non-standardized Gaussian distribution.

The mean is obtained from the CAGR
Inputs
The implicit assumption is that the company will need to approach a new financial structure close to that of the industry average
We decided to use weighted levered betas of comparables as the current financial structure of AC Milan doesn't allow an IPO
Bier Gabriele
Caturano Cristiana
Galateo Nicholas
Migliorati Luca
Monteporzi Federico
Appendix I
EV/Sales results
Appendix II
Choosing comparables criteria & specific weights
Roma
Lazio
Juventus
Galatasaray
Trabzonspor
Tottenham
Porto
Sporting
Fenerbahce
Ajax
Borussia Dortmund
Disney
Celtic
Besiktas
AIK Fotbol
Arsenal
Absolute valuation

Punctual estimation
Taking into account our initial assumptions and the firm's 2012 sustainability report, we aggregated the single Montecarlo estimated sales trying to recreate the trend of the past seven years
Forecast moving from decomposed sales is more precise and detailed

More Montecarlo were launched in order to take into consideration the trend of each specific account

Appendix III
Leverage
Appendix V
Sales 2010 - 2012
Q&A
Appendix VI
Weighted Average Cost of Capital
Appendix IV
Montecarlo Inputs (Variance)
Appendix VII
Capex analysis and estimate
Weights were fixed subjectively trying to take into account particular characteristics of the comparables that has also been used for the picking up; for example, importance of the national championship, participation to international competitions, core business and financial structure

In order to benefit from diversification, we also included a comparable that is not directly linked to football, but has a similar business model and is also included by the main data providers in the leisure and entertainment list: Disney.
Appendix VIII
Depreciation
Full transcript