DCF Studio

    HEI.DE · GER · Basic Materials

    Heidelberg Materials AG

    Also onConsensus Drift

    Implied value per share

    EUR 162.19

    Market price

    EUR 143.90

    Implied upside

    +12.7%

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

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

    Value Per Share

    Perpetuity growth
    EUR 162.19+12.7%
    Exit multiple
    EUR 140.42-2.4%
    Market price
    EUR 143.90

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 21.6bnEUR 21.7bnEUR 21.8bnEUR 22.0bnEUR 22.1bn+0.6%
    EBITEUR 2.7bnEUR 2.7bnEUR 2.8bnEUR 2.8bnEUR 2.8bn+0.6%
    NOPATEUR 2.1bnEUR 2.1bnEUR 2.1bnEUR 2.1bnEUR 2.1bn+0.6%
    Add depreciation & amortisationEUR 1.4bnEUR 1.4bnEUR 1.4bnEUR 1.4bnEUR 1.5bn+0.6%
    Less capital expenditureEUR -1.4bnEUR -1.4bnEUR -1.4bnEUR -1.4bnEUR -1.4bn+0.6%
    Less increase in working capitalEUR -36.2mEUR -36.4mEUR -36.6mEUR -36.9mEUR -37.1m+0.6%
    Free cashflow to firmEUR 2.0bnEUR 2.1bnEUR 2.1bnEUR 2.1bnEUR 2.1bn+0.6%
    Discount factor0.96730.90500.84680.79230.7413-
    Present valueEUR 2.0bnEUR 1.9bnEUR 1.7bnEUR 1.6bnEUR 1.5bn-5.9%
    Present Value Of The ForecastEUR 8.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate2.60%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.938Reported 0.908, pulled toward 1.0 (Blume)
    Cost of equity8.23%Risk-free + beta x equity risk premium
    Cost of debt3.52%Interest expense / average total debt
    Market capitalisationEUR 25.3bn75.7% of capital
    Total debtEUR 8.1bn24.3% of capital, book value as a proxy
    Tax rate24.4%Effective, capped at statutory
    WACC6.88%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 162.19

    74% of EV

    Forecast FCFF, final year
    EUR 2.1bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.1bn
    Less reinvestment at g/ROIC (29.9% of NOPAT)
    EUR -628.1m
    Capitalised
    EUR 1.5bn
    ROIC (reported)
    8.4%
    Terminal value, undiscounted
    EUR 34.6bn
    Terminal value, discounted
    EUR 25.6bn
    Enterprise value
    EUR 34.4bn
    Less net debt
    EUR 5.6bn
    Equity value
    EUR 28.8bn

    Exit at 6.9x EBITDA

    Value per shareEUR 140.42

    71% of EV

    Terminal value, undiscounted
    EUR 29.3bn
    Terminal value, discounted
    EUR 21.7bn
    Enterprise value
    EUR 30.5bn
    Less net debt
    EUR 5.6bn
    Equity value
    EUR 24.9bn

    Spread between methods: 14%.

    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%
    4.88%256.04278.13309.27356.70438.13
    5.88%193.42202.48214.06229.47251.13
    6.88%154.02157.74162.19167.65174.57
    7.88%126.92128.13129.49131.02132.78
    8.88%108.24108.69109.15109.60110.06

    Outlined: this model. Green text: above today's price of 143.90. 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 year0.6%-2.2%-2.7pp
    EBIT margin12.6%11.4%-1.2pp
    Discount rate6.9%7.4%+0.5pp
    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.