DCF Studio

    BRG.AX · ASX · Consumer Cyclical

    Breville Group Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 10.82

    Market price

    AUD 29.73

    Implied upside

    -63.6%

    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.

    Value Per Share

    Perpetuity growth
    AUD 10.82-63.6%
    Exit multiple
    AUD 27.40-7.8%
    Market price
    AUD 29.73

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m68m136mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 1.9bnAUD 2.1bnAUD 2.2bnAUD 2.4bnAUD 2.5bn+7.0%
    EBITAUD 228.8mAUD 244.8mAUD 261.9mAUD 280.2mAUD 299.8m+7.0%
    NOPATAUD 163.6mAUD 175.1mAUD 187.3mAUD 200.4mAUD 214.4m+7.0%
    Add depreciation & amortisationAUD 73.9mAUD 79.1mAUD 84.6mAUD 90.5mAUD 96.8m+7.0%
    Less capital expenditureAUD -90.0mAUD -96.3mAUD -103.0mAUD -110.2mAUD -117.9m+7.0%
    Less increase in working capitalAUD -44.0mAUD -47.1mAUD -50.3mAUD -53.9mAUD -57.6m+7.0%
    Free cashflow to firmAUD 103.6mAUD 110.8mAUD 118.6mAUD 126.9mAUD 135.7m+7.0%
    Discount factor0.94420.84170.75040.66890.5963-
    Present valueAUD 97.8mAUD 93.3mAUD 89.0mAUD 84.9mAUD 80.9m-4.6%
    Present Value Of The ForecastAUD 445.8m

    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
    Beta1.173Reported 1.258, pulled toward 1.0 (Blume)
    Cost of equity12.39%Risk-free + beta x equity risk premium
    Cost of debt8.71%Interest expense / average total debt
    Market capitalisationAUD 4.3bn96.6% of capital
    Total debtAUD 153.4m3.4% of capital, book value as a proxy
    Tax rate28.5%Effective, capped at statutory
    WACC12.17%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 10.82

    71% of EV

    Forecast FCFF, final year
    AUD 135.7m
    Capex at depreciation, working capital in reinvestment
    AUD 214.4m
    Less reinvestment at g/ROIC (18.5% of NOPAT)
    AUD -39.7m
    Capitalised
    AUD 174.8m
    ROIC (reported)
    13.5%
    Terminal value, undiscounted
    AUD 1.9bn
    Terminal value, discounted
    AUD 1.1bn
    Enterprise value
    AUD 1.6bn
    Less net debt
    AUD -39.9m
    Equity value
    AUD 1.6bn

    Exit at 15.0x EBITDA

    Value per shareAUD 27.40

    89% of EV

    Terminal value, undiscounted
    AUD 5.9bn
    Terminal value, discounted
    AUD 3.5bn
    Enterprise value
    AUD 4.0bn
    Less net debt
    AUD -39.9m
    Equity value
    AUD 4.0bn

    Spread between methods: 87%.

    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%
    10.17%13.2613.4713.7113.9814.29
    11.17%11.8211.9612.1012.2612.43
    12.17%10.6610.7410.8210.9111.00
    13.17%9.719.759.799.839.87
    14.17%8.948.968.999.029.05

    Outlined: this model. Green text: above today's price of 29.73. 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 year7.0%44.8%+37.8pp
    EBIT margin11.8%29.9%+18.1pp
    Discount rate12.2%6.1%-6.1pp
    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.