DCF Studio

    BNZL.L · LSE · Consumer Defensive

    Bunzl plc

    Also onConsensus Drift

    Implied value per share

    GBp 3207.54

    Market price

    GBp 2614.00

    Implied upside

    +22.7%

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

    AdjustedReported capital expenditure averages just 0.49% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.87% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    GBp 3207.54+22.7%
    Exit multiple
    GBp 2574.50-1.5%
    Market price
    GBp 2614.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (GBP). Outflows negative.

    0m359m718mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayGBP
    LineFY26FY27FY28FY29FY30CAGR
    RevenueGBP 11.8bnGBP 11.7bnGBP 11.7bnGBP 11.6bnGBP 11.5bn-0.5%
    EBITGBP 780.6mGBP 776.4mGBP 772.2mGBP 768.0mGBP 763.9m-0.5%
    NOPATGBP 585.5mGBP 582.3mGBP 579.2mGBP 576.0mGBP 572.9m-0.5%
    Add depreciation & amortisationGBP 360.1mGBP 358.1mGBP 356.2mGBP 354.2mGBP 352.3m-0.5%
    Less capital expenditureGBP -220.0mGBP -218.8mGBP -217.7mGBP -216.5mGBP -215.3m-0.5%
    Less increase in working capitalGBP -7.5mGBP -7.5mGBP -7.4mGBP -7.4mGBP -7.3m-0.5%
    Free cashflow to firmGBP 718.0mGBP 714.1mGBP 710.3mGBP 706.4mGBP 702.6m-0.5%
    Discount factor0.96850.90850.85220.79940.7498-
    Present valueGBP 695.4mGBP 648.8mGBP 605.3mGBP 564.7mGBP 526.9m-6.7%
    Present Value Of The ForecastGBP 3.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%GBP assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta0.546Reported 0.323, pulled toward 1.0 (Blume)
    Cost of equity7.51%Risk-free + beta x equity risk premium
    Cost of debt5.35%Interest expense / average total debt
    Market capitalisationGBP 8.4bn74.3% of capital
    Total debtGBP 2.9bn25.7% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC6.61%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 shareGBP 32.08

    76% of EV

    Forecast FCFF, final year
    GBP 702.6m
    Capex at depreciation, working capital in reinvestment
    GBP 675.7m
    Less reinvestment at g/ROIC (22.7% of NOPAT)
    GBP -153.6m
    Capitalised
    GBP 522.1m
    ROIC (reported)
    11.0%
    Terminal value, undiscounted
    GBP 13.0bn
    Terminal value, discounted
    GBP 9.8bn
    Enterprise value
    GBP 12.8bn
    Less net debt
    GBP 2.4bn
    Equity value
    GBP 10.5bn

    Exit at 9.2x EBITDA

    Value per shareGBP 25.75

    72% of EV

    Terminal value, undiscounted
    GBP 10.3bn
    Terminal value, discounted
    GBP 7.7bn
    Enterprise value
    GBP 10.7bn
    Less net debt
    GBP 2.4bn
    Equity value
    GBP 8.4bn

    Spread between methods: 22%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.61%50.2956.7166.1681.43110.44
    5.61%36.9239.8343.6548.9156.62
    6.61%28.7830.2632.0834.3837.40
    7.61%23.2924.0825.0126.1327.50
    8.61%19.3419.7620.2420.8021.46

    Outlined: this model. Green text: above today's price of 26.14. 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 year-0.5%-3.8%-3.2pp
    EBIT margin6.6%5.4%-1.2pp
    Discount rate6.6%7.4%+0.8pp
    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.