DCF Studio

    DSFIR.AS · AMS · Basic Materials

    DSM-Firmenich AG

    Also onConsensus Drift

    Implied value per share

    EUR 25.00

    Market price

    EUR 92.16

    Implied upside

    -72.9%

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

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

    Value Per Share

    Perpetuity growth
    EUR 25.00-72.9%
    Exit multiple
    EUR 44.23-52.0%
    Market price
    EUR 92.16

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 9.3bnEUR 9.5bnEUR 9.7bnEUR 10.0bnEUR 10.2bn+2.5%
    EBITEUR 373.7mEUR 383.0mEUR 392.5mEUR 402.3mEUR 412.4m+2.5%
    NOPATEUR 296.0mEUR 303.4mEUR 311.0mEUR 318.7mEUR 326.7m+2.5%
    Add depreciation & amortisationEUR 1.5bnEUR 1.5bnEUR 1.6bnEUR 1.6bnEUR 1.7bn+2.5%
    Less capital expenditureEUR -743.6mEUR -762.1mEUR -781.1mEUR -800.6mEUR -820.6m+2.5%
    Less increase in working capitalEUR 16.1mEUR 16.5mEUR 16.9mEUR 17.4mEUR 17.8m-2.5%
    Free cashflow to firmEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.2bn+2.5%
    Discount factor0.96320.89370.82920.76940.7138-
    Present valueEUR 1.0bnEUR 975.7mEUR 927.9mEUR 882.4mEUR 839.1m-4.9%
    Present Value Of The ForecastEUR 4.7bn

    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
    Beta0.711Reported 0.568, pulled toward 1.0 (Blume)
    Cost of equity8.82%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 22.6bn81.1% of capital
    Total debtEUR 5.3bn18.9% of capital, book value as a proxy
    Tax rate20.8%Effective, capped at statutory
    WACC7.78%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 25.00

    53% of EV

    Forecast FCFF, final year
    EUR 1.2bn
    Capex at depreciation, working capital in reinvestment
    EUR 553.7m
    Less reinvestment at g/ROIC (32.1% of NOPAT)
    EUR -177.9m
    Capitalised
    EUR 375.8m
    ROIC (WACC floor)
    7.8%
    Terminal value, undiscounted
    EUR 7.3bn
    Terminal value, discounted
    EUR 5.2bn
    Enterprise value
    EUR 9.9bn
    Less net debt
    EUR 3.4bn
    Equity value
    EUR 6.5bn

    Exit at 6.9x EBITDA

    Value per shareEUR 44.23

    69% of EV

    Terminal value, undiscounted
    EUR 14.3bn
    Terminal value, discounted
    EUR 10.2bn
    Enterprise value
    EUR 14.8bn
    Less net debt
    EUR 3.4bn
    Equity value
    EUR 11.5bn

    Spread between methods: 56%.

    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%
    5.78%34.8735.0135.1535.3035.44
    6.78%29.1229.2429.3529.4729.59
    7.78%24.8024.9025.0025.1025.19
    8.78%21.4321.5121.6021.6821.76
    9.78%18.7118.7918.8618.9319.00

    Outlined: this model. Green text: above today's price of 92.16. 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 year2.5%29.1%+26.6pp
    EBIT margin4.0%20.1%+16.1pp
    Discount rate7.8%2.7%-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.