DCF Studio

    BVI.PA · PAR · Industrials

    Bureau Veritas SA

    Also onConsensus Drift

    Implied value per share

    EUR 33.71

    Market price

    EUR 27.22

    Implied upside

    +23.9%

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

    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 33.71+23.9%
    Exit multiple
    EUR 34.41+26.4%
    Market price
    EUR 27.22

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 6.8bnEUR 7.1bnEUR 7.4bnEUR 7.7bnEUR 8.1bn+4.6%
    EBITEUR 967.2mEUR 1.0bnEUR 1.1bnEUR 1.1bnEUR 1.2bn+4.6%
    NOPATEUR 717.7mEUR 750.7mEUR 785.2mEUR 821.3mEUR 859.0m+4.6%
    Add depreciation & amortisationEUR 328.1mEUR 343.2mEUR 359.0mEUR 375.5mEUR 392.7m+4.6%
    Less capital expenditureEUR -162.3mEUR -169.8mEUR -177.6mEUR -185.8mEUR -194.3m+4.6%
    Less increase in working capitalEUR 25.2mEUR 26.3mEUR 27.6mEUR 28.8mEUR 30.1m-4.6%
    Free cashflow to firmEUR 908.6mEUR 950.4mEUR 994.1mEUR 1.0bnEUR 1.1bn+4.6%
    Discount factor0.96690.90390.84500.79000.7385-
    Present valueEUR 878.5mEUR 859.1mEUR 840.0mEUR 821.4mEUR 803.2m-2.2%
    Present Value Of The ForecastEUR 4.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.823Reported 0.736, pulled toward 1.0 (Blume)
    Cost of equity8.14%Risk-free + beta x equity risk premium
    Cost of debt3.20%Interest expense / average total debt
    Market capitalisationEUR 12.1bn79.7% of capital
    Total debtEUR 3.1bn20.3% of capital, book value as a proxy
    Tax rate25.8%Effective, capped at statutory
    WACC6.97%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 shareEUR 33.71

    75% of EV

    Forecast FCFF, final year
    EUR 1.1bn
    Capex at depreciation, working capital in reinvestment
    EUR 880.4m
    Less reinvestment at g/ROIC (16.4% of NOPAT)
    EUR -144.7m
    Capitalised
    EUR 735.7m
    ROIC (reported)
    15.2%
    Terminal value, undiscounted
    EUR 16.9bn
    Terminal value, discounted
    EUR 12.5bn
    Enterprise value
    EUR 16.7bn
    Less net debt
    EUR 1.7bn
    Equity value
    EUR 15.0bn

    Exit at 11.2x EBITDA

    Value per shareEUR 34.41

    75% of EV

    Terminal value, undiscounted
    EUR 17.3bn
    Terminal value, discounted
    EUR 12.8bn
    Enterprise value
    EUR 17.0bn
    Less net debt
    EUR 1.7bn
    Equity value
    EUR 15.3bn

    Spread between methods: 2%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.97%48.1653.6961.4473.1092.66
    5.97%37.1439.9743.6048.4355.20
    6.97%30.1431.7533.7136.1639.29
    7.97%25.2926.2727.4228.8030.47
    8.97%21.7222.3423.0623.8824.85

    Outlined: this model. Green text: above today's price of 27.22. 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 year4.6%0.4%-4.2pp
    EBIT margin14.3%11.6%-2.7pp
    Discount rate7.0%8.0%+1.0pp
    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.