DCF Studio

    CRDA.L · LSE · Basic Materials

    Croda International Plc

    Also onConsensus Drift

    Implied value per share

    GBp 7788.25

    Market price

    GBp 3163.00

    Implied upside

    +146.2%

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

    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    GBp 7788.25+146.2%
    Exit multiple
    GBp 1571.08-50.3%
    Market price
    GBp 3163.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (GBP). Outflows negative.

    0m90m181mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayGBP
    LineFY26FY27FY28FY29FY30CAGR
    RevenueGBP 1.6bnGBP 1.5bnGBP 1.4bnGBP 1.3bnGBP 1.2bn-6.7%
    EBITGBP 262.0mGBP 244.6mGBP 228.3mGBP 213.1mGBP 198.9m-6.7%
    NOPATGBP 196.5mGBP 183.4mGBP 171.2mGBP 159.8mGBP 149.2m-6.7%
    Add depreciation & amortisationGBP 117.5mGBP 109.7mGBP 102.4mGBP 95.6mGBP 89.2m-6.7%
    Less capital expenditureGBP -145.4mGBP -135.8mGBP -126.7mGBP -118.3mGBP -110.4m-6.7%
    Less increase in working capitalGBP 12.2mGBP 11.4mGBP 10.6mGBP 9.9mGBP 9.3m+6.7%
    Free cashflow to firmGBP 180.8mGBP 168.7mGBP 157.5mGBP 147.0mGBP 137.3m-6.7%
    Discount factor0.98350.95140.92040.89030.8613-
    Present valueGBP 177.8mGBP 160.5mGBP 145.0mGBP 130.9mGBP 118.2m-9.7%
    Present Value Of The ForecastGBP 732.4m

    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
    Beta0.952Reported 0.929, pulled toward 1.0 (Blume)
    Cost of equity9.74%Risk-free + beta x equity risk premium
    Cost of debt4.50%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationGBP 0.000.0% of capital
    Total debtGBP 696.6m100.0% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC3.38%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 77.88

    94% of EV

    Forecast FCFF, final year
    GBP 137.3m
    Capex at depreciation, working capital in reinvestment
    GBP 170.1m
    Less reinvestment at g/ROIC (37.8% of NOPAT)
    GBP -64.3m
    Capitalised
    GBP 105.7m
    ROIC (reported)
    6.6%
    Terminal value, undiscounted
    GBP 12.4bn
    Terminal value, discounted
    GBP 10.7bn
    Enterprise value
    GBP 11.4bn
    Less net debt
    GBP 523.8m
    Equity value
    GBP 10.9bn

    Exit at 8.0x EBITDA

    Value per shareGBP 15.71

    73% of EV

    Terminal value, undiscounted
    GBP 2.3bn
    Terminal value, discounted
    GBP 2.0bn
    Enterprise value
    GBP 2.7bn
    Less net debt
    GBP 523.8m
    Equity value
    GBP 2.2bn

    Spread between methods: 133%.

    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%
    1.38%—————
    2.38%99.87209.47———
    3.38%45.3955.7677.88158.80—
    4.38%28.7931.4635.5242.4657.26
    5.38%20.7521.5522.6024.0626.25

    Outlined: this model. Green text: above today's price of 31.63. 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-6.7%-21.8%-15.2pp
    EBIT margin16.5%6.0%-10.5pp
    Discount rate3.4%4.6%+1.2pp
    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.