DCF Studio

    HEXA-B.ST · STO · Technology

    Hexagon AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 35.22

    Market price

    SEK 95.56

    Implied upside

    -63.1%

    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 143.8x 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 35.22-63.1%
    Exit multiple
    SEK 115.33+20.7%
    Market price
    SEK 95.56

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 5.5bnEUR 5.6bnEUR 5.7bnEUR 5.8bnEUR 5.9bn+1.7%
    EBITEUR 1.3bnEUR 1.3bnEUR 1.4bnEUR 1.4bnEUR 1.4bn+1.7%
    NOPATEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.2bn+1.7%
    Add depreciation & amortisationEUR 616.2mEUR 626.5mEUR 637.0mEUR 647.7mEUR 658.6m+1.7%
    Less capital expenditureEUR -628.4mEUR -639.0mEUR -649.7mEUR -660.6mEUR -671.7m+1.7%
    Less increase in working capitalEUR -25.9mEUR -26.3mEUR -26.8mEUR -27.2mEUR -27.7m+1.7%
    Free cashflow to firmEUR 1.0bnEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.1bn+1.7%
    Discount factor0.95300.86540.78600.71380.6482-
    Present valueEUR 989.0mEUR 913.3mEUR 843.3mEUR 778.7mEUR 719.0m-7.7%
    Present Value Of The ForecastEUR 4.2bn

    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
    Beta0.926Reported 0.890, pulled toward 1.0 (Blume)
    Cost of equity10.22%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 256.5bn98.4% of capital
    Total debtEUR 4.1bn1.6% of capital, book value as a proxy
    Tax rate18.2%Effective, capped at statutory
    WACC10.11%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 3.12

    64% of EV

    Forecast FCFF, final year
    EUR 1.1bn
    Capex at depreciation, working capital in reinvestment
    EUR 1.2bn
    Less reinvestment at g/ROIC (24.7% of NOPAT)
    EUR -284.3m
    Capitalised
    EUR 865.8m
    ROIC (WACC floor)
    10.1%
    Terminal value, undiscounted
    EUR 11.7bn
    Terminal value, discounted
    EUR 7.6bn
    Enterprise value
    EUR 11.8bn
    Less net debt
    EUR 3.4bn
    Equity value
    EUR 8.4bn

    Exit at 20.0x EBITDA

    Value per shareEUR 10.22

    86% of EV

    Terminal value, undiscounted
    EUR 41.3bn
    Terminal value, discounted
    EUR 26.8bn
    Enterprise value
    EUR 31.0bn
    Less net debt
    EUR 3.4bn
    Equity value
    EUR 27.6bn

    Spread between methods: 106%.

    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%
    8.11%4.144.164.184.204.21
    9.11%3.563.573.593.613.62
    10.11%3.093.113.123.133.15
    11.11%2.712.722.742.752.76
    12.11%2.392.402.412.422.43

    Outlined: this model. Green text: above today's price of 8.47. 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 year1.7%24.2%+22.5pp
    EBIT margin23.8%52.7%+28.8pp
    Discount rate10.1%5.4%-4.7pp
    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.