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20110621_Valeo DCF Model_Final Version

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VALEO SA Valuati Global Capital Markets Assignment Discounted Cash Flow Analysis Saâdeddine YAHIA Guilhem DACH Cyril KOTAS Minh-Quang PHAM Hubert CHRISTOPHE
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Page 1: 20110621_Valeo DCF Model_Final Version

VALEO SA ValuationGlobal Capital Markets Assignment

Discounted Cash Flow Analysis

Saâdeddine YAHIA Guilhem DACH Cyril KOTAS Minh-Quang PHAM Hubert CHRISTOPHE

Page 2: 20110621_Valeo DCF Model_Final Version

VALEO SA ValuationGlobal Capital Markets Assignment

Discounted Cash Flow Analysis

Saâdeddine YAHIA Guilhem DACH Cyril KOTAS Minh-Quang PHAM Hubert CHRISTOPHE

Page 3: 20110621_Valeo DCF Model_Final Version

Valeo SA ValuationKey figures

Beta 1.55WACC 8.8%Price per share based on DCF 55.40

Page 4: 20110621_Valeo DCF Model_Final Version

Real Value Real ValueASSET 12/31/2009 12/31/2010Net assetsGoodwill 1154 1154Tangible asssets 1,665.00 € 1,655.00 € Intangible asset 527.00 € 600.00 € Prepaid pension cost - € - €

Net fixed assets 3,346 3,4096% 4%

Working capital 449 422Cash 860.00 € 1,316.00 € Asset hold for sale 5.00 € 5.00 € ASSET 4,660 5,152Capital Employed 3,795 3,831

LIABILITIES 12/31/2009 12/31/2010Share Capital 235.00 € 235.00 €

Additional paid-in capital 1,402.00 € 1,402.00 € Retained earnings - 511.00 € - 399.00 € Translation reserve - € - € Minority interests 51.00 € 51.00 €

Total common stockholders investment $5,900,000,000 $6,545,000,000 Total common stockholders investment 1,177.00 € 1,289.00 € Total other long-term liabilities 799.00 € - € LONG-TERM DEBT, LESS CURRENT PORTION 1,447.00 € 1,502.00 € Total Debt 1,447 1,502Gearing 123% 117%Current portion of long term debt 192.00 € 192.00 €

16% 15%Short term Debt 0 0

Debt and Other Borrowing 1,639 1,694

OTHER LIABILITIES 1097 1089DEFERRED INCOME TAXES 16 16

Non operating Debt 1,113 1,10524% 21%

TOTAL DEBT 2,752 2,799

TOTAL LIABILITIES 3,929 4,088

Page 5: 20110621_Valeo DCF Model_Final Version

Estimation12/31/2011

1154 1,655.00 € 820.00 € - €

3,6297%574

1,089.00 € 5.00 €

5,2974,203

12/31/2011 235.00 €

1,402.00 € - 121.00 € - € 51.00 €

$7,288,000,000 1,567.00 € - € 1,299.00 €

1,29983%

192.00 € 12%

00%

1,491

120816

1,22423%

2,715

4,282

Page 6: 20110621_Valeo DCF Model_Final Version

VALEO SAIncome statement(€ in milions)

Detailed forecast Fading period Normative yearReal Value Real Value Estimation Estimation Estimation Estimation Estimation Estimation

2009 2010 2011 2012 2013 2014 2015 2016 Normative year

Sales 7499 9632 8636 9205 9748 10255 10727 11156 11546Growth rate 28.44% -10.34% 6.59% 5.90% 5.20% 4.60% 4.00% 3.50%

Operating Expenses 6,361 7,897 7,544 7,917 8,603 9,099 9,509 9,874EBITDA 133 1,325 1,092 1,288 1,146 1,156 1,218 1,282

EBITDA margin 1.8% 13.8% 12.6% 14.0% 11.8% 11.3% 11.4% 11.5%Depreciation and Amortizatopm 49 735 553 561 512 541 574 612 634

% Fixed Assets 1.46% 21.56% 15.24% 14.90% 13.0% 13.0% 13.0% 13.0% 13.05%

EBIT 84 590 539 727 634 615 644 669 693Operating margin 1.1% 6.1% 6.2% 7.9% 6.5% 6.0% 6.0% 6.0% 6.0%

Interest Income -51 7 27 43 46 48 50 52Growth rate -114% 286% 59% 6% 5% 5% 4% -197.76%

Interest Expenses -107 -126 -107 -88 -82 -77 -72 -68Growth rate 18% -15% -18% -6% -6% -6% -6% -6.31%

INCOME BEFORE TAXES -74 471 459 682 597 693 716 737 755PROVISION FOR INCOME TAXES 79 104 158 235 180 209 216 223 228NET INCOME -153 367 301 447 417 483 500 515 527

Net margin -2.0% 3.8% 3.5% 4.9% 4.3% 4.7% 4.7% 4.6% 4.6%

VALEO SADCF Model(€ in milions)

Detailed forecast Fading period Normative yearReal Value Real Value Estimation Estimation Estimation Estimation Estimation Estimation

2009 2010 2011 2012 2013 2014 2015 2016 Normative year

NOPAT 5 486 381 492 453 406 427 447 465+ Depreciation and Amortization 49 735 553 561 512 541 574 612 634-capex -430 -725 -553 -561 -514 -539 -574 -612 -803-working cap variation 109 27 -152 -11 -11 -36 -39 -41 -42

FCF 229 481 440 372 389 406 253Discount coefficient 0.09 0.92 0.84 0.78 0.71 0.66 0.60 0.60DCF 210 406 342 265 255 245 2878

Fixed assets 3,346 3,409 3,629 3,764 3,924 4,145 4,401 4,692 4857Working capital 449 422 574 585 596 632 671 712 697WC/Turnover 6.0% 4.4% 6.6% 6.4% 6.1% 6.2% 6.3% 6.4% 6.0%Capital Employed 3,795 3,831 4,203 4,349 4,520 4,778 5,071 5,404 5,554RCE 12.8% 9.9% 11.7% 10.4% 9.0% 8.9% 8.8% 8.6%

Company value 4,601.98 Net debt 440.00 Equity value 4,161.98 Number of share outstanding 2010 75,124,014.00

Value per share 55.40

0

0. 02

0. 04

0. 06

0. 08

Taux de croissance CA

Taux de croissance CA total

Page 7: 20110621_Valeo DCF Model_Final Version

VALEO SAIncome statement(€ in milions)

Risk-free rate 3.33%Average debts interest rates (before taxes) 6.35%Taxe rate 10.3%country risk premium 6.0%Adjusted Beta 1.55Beta 1.82

Cost of Equity 12.63%Weight of FP dans le passif 44.71%Part of the WACC coming from Equity 5.65%

Average cost of debts before taxes 6.35%Average cost of debts after taxes 5.69%weight of debts in the passif 55.29%Part of the WACC coming from Debts 3.15%

WACC 8.80%

Equity 1,688Financial debts 1,447Ratio Debt/Equity 0.86

Number of share outstanding in 2010 75.214Price per share 15.56Capitalisation FP 1,170

Page 8: 20110621_Valeo DCF Model_Final Version

Date FedEx S&P 500 Rent. FedEx Rent. S&P500 XY X¨^21-Jul-06 28.61 5009.42 0.18% - 0.03 - 0.0000 0.0008

1-Aug-06 28.56 5156.04 1.53% - 0.02 - 0.0003 0.0003 1-Sep-06 28.13 5250.01 -4.61% 0.00 - 0.0000 0.0000 1-Oct-06 29.49 5248.73 -2.22% - 0.01 0.0003 0.0002 1-Nov-06 30.16 5327.64 -4.35% - 0.04 0.0017 0.0015 1-Dec-06 31.53 5541.76 -9.94% - 0.01 0.0012 0.0001 1-Jan-07 35.01 5608.31 -5.91% 0.02 - 0.0010 0.0003 1-Feb-07 37.21 5516.32 -15.26% - 0.02 0.0032 0.0004 1-Mar-07 43.91 5634.16 3.73% - 0.05 - 0.0020 0.0030 1-Apr-07 42.33 5960.04 0.00% - 0.02 - 0.0006

1-May-07 42.33 6104 6.33% 0.01 0.0005 0.0001 1-Jun-07 39.81 6054.93 4.82% 0.05 0.0025 0.0028

1-Jul-07 37.98 5751.08 6.78% 0.02 0.0011 0.0002 1-Aug-07 35.57 5662.7 -8.84% - 0.01 0.0008 0.0001 1-Sep-07 39.02 5715.69 3.20% - 0.02 - 0.0007 0.0005 1-Oct-07 37.81 5847.95 9.59% 0.03 0.0030 0.0010 1-Nov-07 34.5 5670.57 22.34% 0.01 0.0022 0.0001 1-Dec-07 28.2 5614.08 14.59% 0.15 0.0223 0.0234 1-Jan-08 24.61 4869.79 -2.07% 0.02 - 0.0003 0.0003 1-Feb-08 25.13 4790.66 0.04% 0.02 0.0000 0.0003 1-Mar-08 25.12 4707.07 -3.50% - 0.06 0.0020 0.0034 1-Apr-08 26.03 4996.54 1.56% - 0.00 - 0.0001 0.0000

1-May-08 25.63 5014.28 25.64% 0.13 0.0335 0.0171 1-Jun-08 20.4 4434.85 -2.16% 0.01 - 0.0002 0.0001 1-Jul-08 20.85 4392.36 -14.55% - 0.02 0.0029 0.0004

1-Aug-08 24.4 4482 14.82% 0.11 0.0165 0.0125 1-Sep-08 21.25 4032.1 56.36% 0.16 0.0881 0.0244 1-Oct-08 13.59 3487.07 37.97% 0.07 0.0261 0.0047 1-Nov-08 9.85 3262.68 -7.21% 0.01 - 0.0010 0.0002 1-Dec-08 10.615 3217.97 21.45% 0.08 0.0176 0.0067 1-Jan-09 8.74 2973.92 -11.72% 0.10 - 0.0118 0.0101 1-Feb-09 9.9 2702.48 -10.04% - 0.04 0.0038 0.0014 1-Mar-09 11.005 2807.34 -29.97% - 0.11 0.0334 0.0124 1-Apr-09 15.715 3159.85 12.41% - 0.04 - 0.0045 0.0013

1-May-09 13.98 3277.65 6.64% 0.04 0.0029 0.0019 1-Jun-09 13.11 3140.44 -29.52% - 0.08 0.0246 0.0070 1-Jul-09 18.6 3426.27 4.73% - 0.06 - 0.0029 0.0039

1-Aug-09 17.76 3653.54 -1.25% - 0.04 0.0005 0.0014 1-Sep-09 17.985 3795.41 -2.94% 0.05 - 0.0015 0.0027 1-Oct-09 18.53 3607.69 -2.76% - 0.02 0.0005 0.0004 1-Nov-09 19.055 3680.15 -22.32% - 0.07 0.0145 0.0042 1-Dec-09 24.53 3936.33 2.70% 0.05 0.0014 0.0028 1-Jan-10 23.885 3739.46 6.56% 0.01 0.0005 0.0001 1-Feb-10 22.415 3708.8 -15.18% - 0.07 0.0101 0.0045 1-Mar-10 26.425 3974.01 4.01% 0.04 0.0017 0.0017 1-Apr-10 25.405 3816.99 12.36% 0.09 0.0109 0.0078

1-May-10 22.61 3507.56 0.47% 0.02 0.0001 0.0004 1-Jun-10 22.505 3442.89 -17.91% - 0.05 0.0098 0.0030 1-Jul-10 27.415 3641.14 -0.45% 0.04 - 0.0002 0.0019

1-Aug-10 27.54 3490.79 -18.96% - 0.06 0.0115 0.0036 1-Sep-10 33.985 3715.18 -12.00% - 0.03 0.0037 0.0010 1-Oct-10 38.62 3833.5 0.04% 0.06 0.0000 0.0038 1-Nov-10 38.605 3610.44 -9.09% - 0.05 0.0046 0.0026

Page 9: 20110621_Valeo DCF Model_Final Version

1-Dec-10 42.465 3804.78 -0.67% - 0.05 0.0003 0.0025 1-Jan-11 42.75 4005.5 -5.21% - 0.03 0.0013 0.0007 1-Feb-11 45.1 4110.35 9.59% 0.03 0.0029 0.0009 1-Mar-11 41.155 3989.18 -4.28% - 0.03 0.0012 0.0008 1-Apr-11 42.995 4106.92 -2.33% 0.02 - 0.0006 0.0006

1-May-11 44.02 4006.94

1366.42 0.17% 0.42% 0.00250821394.46

Page 10: 20110621_Valeo DCF Model_Final Version

Variance 0.00325697Covariance 0.005931659Raw Bêta 1.821220457

-40.00% -20.00% 0.00% 20.00% 40.00% 60.00% 80.00%

-0.15

-0.10

-0.05

-

0.05

0.10

0.15

0.20

Page 11: 20110621_Valeo DCF Model_Final Version

-40.00% -20.00% 0.00% 20.00% 40.00% 60.00% 80.00%

-0.15

-0.10

-0.05

-

0.05

0.10

0.15

0.20


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