DCF Studio

    EVO.ST · STO · Consumer Cyclical

    Evolution AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 1400.68

    Market price

    SEK 865.80

    Implied upside

    +61.8%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · EUR model at 11.2866

    AdjustedReports in EUR, trades in SEK. Modelled in EUR, converted at the end.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 116.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    SEK 1400.68+61.8%
    Exit multiple
    SEK 2263.20+161.4%
    Market price
    SEK 865.80

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 2.3bnEUR 2.6bnEUR 2.9bnEUR 3.3bnEUR 3.7bn+12.4%
    EBITEUR 1.4bnEUR 1.6bnEUR 1.8bnEUR 2.0bnEUR 2.3bn+12.4%
    NOPATEUR 1.3bnEUR 1.4bnEUR 1.6bnEUR 1.8bnEUR 2.0bn+12.4%
    Add depreciation & amortisationEUR 165.2mEUR 185.6mEUR 208.6mEUR 234.4mEUR 263.3m+12.4%
    Less capital expenditureEUR -145.4mEUR -163.3mEUR -183.5mEUR -206.2mEUR -231.7m+12.4%
    Less increase in working capitalEUR -56.9mEUR -63.9mEUR -71.8mEUR -80.7mEUR -90.7m+12.4%
    Free cashflow to firmEUR 1.2bnEUR 1.4bnEUR 1.6bnEUR 1.8bnEUR 2.0bn+12.4%
    Discount factor0.95550.87240.79650.72720.6639-
    Present valueEUR 1.2bnEUR 1.2bnEUR 1.2bnEUR 1.3bnEUR 1.3bn+2.6%
    Present Value Of The ForecastEUR 6.3bn

    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
    Beta0.820Reported 0.732, pulled toward 1.0 (Blume)
    Cost of equity9.53%Risk-free + beta x equity risk premium
    Cost of debt6.00%Interest expense / average total debt
    Market capitalisationEUR 159.3bn99.9% of capital
    Total debtEUR 91.1m0.1% of capital, book value as a proxy
    Tax rate10.3%Effective, capped at statutory
    WACC9.53%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 124.10

    74% of EV

    Forecast FCFF, final year
    EUR 2.0bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.1bn
    Less reinvestment at g/ROIC (9.6% of NOPAT)
    EUR -199.3m
    Capitalised
    EUR 1.9bn
    ROIC (reported)
    26.1%
    Terminal value, undiscounted
    EUR 27.4bn
    Terminal value, discounted
    EUR 18.2bn
    Enterprise value
    EUR 24.4bn
    Less net debt
    EUR -726.9m
    Equity value
    EUR 25.2bn

    Exit at 20.0x EBITDA

    Value per shareEUR 200.52

    84% of EV

    Terminal value, undiscounted
    EUR 50.7bn
    Terminal value, discounted
    EUR 33.7bn
    Enterprise value
    EUR 39.9bn
    Less net debt
    EUR -726.9m
    Equity value
    EUR 40.7bn

    Spread between methods: 47%.

    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%
    7.53%153.17161.79172.09184.63200.25
    8.53%131.63137.40144.11152.01161.45
    9.53%115.47119.51124.10129.38135.51
    10.53%102.90105.82109.08112.77116.95
    11.53%92.8595.0197.40100.05103.02

    Outlined: this model. Green text: above today's price of 76.71. 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 year12.4%0.0%-12.3pp
    EBIT margin61.4%37.1%-24.3pp
    Discount rate9.5%14.1%+4.6pp
    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.