DCF Studio

    CPR.MI · MIL · Consumer Defensive

    Davide Campari-Milano N.V.

    Also onConsensus Drift

    Implied value per share

    EUR 4.92

    Market price

    EUR 5.90

    Implied upside

    -16.6%

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

    AdjustedCapital expenditure runs at 12.2% of revenue against depreciation of 4.0%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 4.92-16.6%
    Exit multiple
    EUR 5.88-0.2%
    Market price
    EUR 5.90

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m175m349mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 3.2bnEUR 3.3bnEUR 3.5bnEUR 3.6bnEUR 3.7bn+4.2%
    EBITEUR 600.2mEUR 625.3mEUR 651.5mEUR 678.8mEUR 707.2m+4.2%
    NOPATEUR 450.1mEUR 469.0mEUR 488.6mEUR 509.1mEUR 530.4m+4.2%
    Add depreciation & amortisationEUR 128.4mEUR 133.7mEUR 139.3mEUR 145.2mEUR 151.3m+4.2%
    Less capital expenditureEUR -387.6mEUR -403.8mEUR -420.8mEUR -438.4mEUR -456.8m+4.2%
    Less increase in working capitalEUR 105.4mEUR 109.9mEUR 114.5mEUR 119.3mEUR 124.3m-4.2%
    Free cashflow to firmEUR 296.3mEUR 308.7mEUR 321.7mEUR 335.1mEUR 349.2m+4.2%
    Discount factor0.96700.90410.84540.79040.7391-
    Present valueEUR 286.5mEUR 279.1mEUR 271.9mEUR 264.9mEUR 258.1m-2.6%
    Present Value Of The ForecastEUR 1.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.635Reported 0.455, pulled toward 1.0 (Blume)
    Cost of equity8.33%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 7.1bn73.4% of capital
    Total debtEUR 2.6bn26.6% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC6.95%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 4.92

    82% of EV

    Forecast FCFF, final year
    EUR 349.2m
    Capex at depreciation, working capital in reinvestment
    EUR 544.9m
    Less reinvestment at g/ROIC (31.2% of NOPAT)
    EUR -170.2m
    Capitalised
    EUR 374.7m
    ROIC (reported)
    8.0%
    Terminal value, undiscounted
    EUR 8.6bn
    Terminal value, discounted
    EUR 6.4bn
    Enterprise value
    EUR 7.7bn
    Less net debt
    EUR 1.8bn
    Equity value
    EUR 5.9bn

    Exit at 11.9x EBITDA

    Value per shareEUR 5.88

    85% of EV

    Terminal value, undiscounted
    EUR 10.2bn
    Terminal value, discounted
    EUR 7.5bn
    Enterprise value
    EUR 8.9bn
    Less net debt
    EUR 1.8bn
    Equity value
    EUR 7.1bn

    Spread between methods: 18%.

    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%
    4.95%8.399.1310.1711.7214.33
    5.95%6.126.416.787.277.95
    6.95%4.684.794.925.075.27
    7.95%3.693.713.743.763.79
    8.95%3.053.073.093.103.12

    Outlined: this model. Green text: above today's price of 5.90. 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 year4.2%6.7%+2.5pp
    EBIT margin18.9%21.6%+2.7pp
    Discount rate7.0%6.4%-0.6pp
    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.