DCF Studio

    BGA.AX · ASX · Consumer Defensive

    Bega Cheese Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD -1.07

    Market price

    AUD 6.00

    Implied upside

    -117.9%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.

    Current EV/EBITDA of 20.2x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    AUD -1.07-117.9%
    Exit multiple
    AUD 2.41-59.9%
    Market price
    AUD 6.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m1m2mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 3.9bnAUD 4.1bnAUD 4.2bnAUD 4.4bnAUD 4.6bn+3.8%
    EBITAUD -36.5mAUD -37.8mAUD -39.3mAUD -40.8mAUD -42.3m-3.8%
    NOPATAUD -27.3mAUD -28.4mAUD -29.5mAUD -30.6mAUD -31.7m-3.8%
    Add depreciation & amortisationAUD 103.5mAUD 107.4mAUD 111.4mAUD 115.6mAUD 120.0m+3.8%
    Less capital expenditureAUD -95.1mAUD -98.7mAUD -102.4mAUD -106.3mAUD -110.3m+3.8%
    Less increase in working capitalAUD 20.7mAUD 21.4mAUD 22.2mAUD 23.1mAUD 24.0m-3.8%
    Free cashflow to firmAUD 1.7mAUD 1.8mAUD 1.8mAUD 1.9mAUD 2.0m+3.8%
    Discount factor0.95950.88330.81320.74870.6892-
    Present valueAUD 1.6mAUD 1.5mAUD 1.5mAUD 1.4mAUD 1.4m-4.5%
    Present Value Of The ForecastAUD 7.4m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta0.743Reported 0.617, pulled toward 1.0 (Blume)
    Cost of equity9.81%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 1.8bn79.5% of capital
    Total debtAUD 471.4m20.5% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC8.62%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareAUD -1.07

    0% of EV

    Terminal value, undiscounted
    AUD 0.00
    Terminal value, discounted
    AUD 0.00
    Enterprise value
    AUD 7.4m
    Less net debt
    AUD 338.0m
    Equity value
    AUD -330.6m

    Exit at 20.0x EBITDA

    Value per shareAUD 2.41

    99% of EV

    Terminal value, undiscounted
    AUD 1.6bn
    Terminal value, discounted
    AUD 1.1bn
    Enterprise value
    AUD 1.1bn
    Less net debt
    AUD 338.0m
    Equity value
    AUD 740.5m

    Sensitivity

    Value per share (AUD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.62%-1.07-1.07-1.07-1.07-1.07
    7.62%-1.07-1.07-1.07-1.07-1.07
    8.62%-1.07-1.07-1.07-1.07-1.07
    9.62%-1.07-1.07-1.07-1.07-1.07
    10.62%-1.07-1.07-1.07-1.07-1.07

    Outlined: this model. Green text: above today's price of 6.00. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year3.8%46.7%+42.9pp
    EBIT margin-0.9%5.0%+6.0pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.