DCF Studio

    DNL.AX · ASX · Basic Materials

    Dyno Nobel Limited

    Also onConsensus Drift

    Implied value per share

    AUD 0.24

    Market price

    AUD 4.10

    Implied upside

    -94.0%

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

    Wrong toolThis model values the shares at 6.0% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedCapital expenditure runs at 9.0% of revenue against depreciation of 6.5%. 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.

    Value Per Share

    Perpetuity growth
    AUD 0.24-94.0%
    Exit multiple
    AUD 0.75-81.6%
    Market price
    AUD 4.10

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m100m200mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayAUD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueAUD 3.1bnAUD 2.6bnAUD 2.2bnAUD 1.8bnAUD 1.5bn-16.2%
    EBITAUD 361.2mAUD 302.5mAUD 253.3mAUD 212.2mAUD 177.7m-16.2%
    NOPATAUD 287.7mAUD 240.9mAUD 201.8mAUD 169.0mAUD 141.5m-16.2%
    Add depreciation & amortisationAUD 202.7mAUD 169.8mAUD 142.2mAUD 119.1mAUD 99.7m-16.2%
    Less capital expenditureAUD -279.5mAUD -234.1mAUD -196.0mAUD -164.2mAUD -137.5m-16.2%
    Less increase in working capitalAUD -10.6mAUD -8.9mAUD -7.4mAUD -6.2mAUD -5.2m-16.2%
    Free cashflow to firmAUD 200.3mAUD 167.7mAUD 140.5mAUD 117.7mAUD 98.5m-16.2%
    Discount factor0.96050.88610.81750.75420.6958-
    Present valueAUD 192.4mAUD 148.6mAUD 114.8mAUD 88.7mAUD 68.6m-22.7%
    Present Value Of The ForecastAUD 613.1m

    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
    Beta0.604Reported 0.409, pulled toward 1.0 (Blume)
    Cost of equity8.97%Risk-free + beta x equity risk premium
    Cost of debt7.95%Interest expense / average total debt
    Market capitalisationAUD 7.2bn78.1% of capital
    Total debtAUD 2.0bn21.9% of capital, book value as a proxy
    Tax rate20.4%Effective, capped at statutory
    WACC8.39%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 0.24

    66% of EV

    Forecast FCFF, final year
    AUD 98.5m
    Capex at depreciation, working capital in reinvestment
    AUD 141.5m
    Less reinvestment at g/ROIC (29.8% of NOPAT)
    AUD -42.2m
    Capitalised
    AUD 99.4m
    ROIC (WACC floor)
    8.4%
    Terminal value, undiscounted
    AUD 1.7bn
    Terminal value, discounted
    AUD 1.2bn
    Enterprise value
    AUD 1.8bn
    Less net debt
    AUD 1.4bn
    Equity value
    AUD 454.4m

    Exit at 11.1x EBITDA

    Value per shareAUD 0.75

    78% of EV

    Terminal value, undiscounted
    AUD 3.1bn
    Terminal value, discounted
    AUD 2.1bn
    Enterprise value
    AUD 2.8bn
    Less net debt
    AUD 1.4bn
    Equity value
    AUD 1.4bn

    Spread between methods: 102%.

    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%
    6.39%0.530.530.530.540.54
    7.39%0.360.370.370.370.38
    8.39%0.240.240.240.250.25
    9.39%0.140.140.150.150.15
    10.39%0.060.060.070.070.07

    Outlined: this model. Green text: above today's price of 4.10. 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-16.2%19.5%+35.8pp
    EBIT margin11.6%51.5%+39.9pp
    Discount rate8.4%3.3%-5.1pp
    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.