DCF Studio

    HOLN.SW · EBS · Basic Materials

    Holcim AG

    Also onConsensus Drift

    Implied value per share

    CHF 33.48

    Market price

    CHF 67.56

    Implied upside

    -50.4%

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

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

    Value Per Share

    Perpetuity growth
    CHF 33.48-50.4%
    Exit multiple
    CHF 25.23-62.7%
    Market price
    CHF 67.56

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CHF). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCHF
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCHF 12.8bnCHF 10.4bnCHF 8.5bnCHF 6.9bnCHF 5.6bn-18.6%
    EBITCHF 1.7bnCHF 1.4bnCHF 1.1bnCHF 931.4mCHF 757.9m-18.6%
    NOPATCHF 1.5bnCHF 1.2bnCHF 973.0mCHF 791.7mCHF 644.2m-18.6%
    Add depreciation & amortisationCHF 1.1bnCHF 890.8mCHF 724.8mCHF 589.8mCHF 479.9m-18.6%
    Less capital expenditureCHF -778.0mCHF -633.0mCHF -515.1mCHF -419.1mCHF -341.0m-18.6%
    Less increase in working capitalCHF 52.9mCHF 43.0mCHF 35.0mCHF 28.5mCHF 23.2m+18.6%
    Free cashflow to firmCHF 1.8bnCHF 1.5bnCHF 1.2bnCHF 990.9mCHF 806.2m-18.6%
    Discount factor0.97770.93460.89340.85400.8163-
    Present valueCHF 1.8bnCHF 1.4bnCHF 1.1bnCHF 846.1mCHF 658.1m-22.2%
    Present Value Of The ForecastCHF 5.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate0.50%CHF assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta0.826Reported 0.740, pulled toward 1.0 (Blume)
    Cost of equity5.04%Risk-free + beta x equity risk premium
    Cost of debt3.27%Interest expense / average total debt
    Market capitalisationCHF 37.4bn81.1% of capital
    Total debtCHF 8.7bn18.9% of capital, book value as a proxy
    Tax rate15.0%Effective, capped at statutory
    WACC4.61%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 shareCHF 33.48

    73% of EV

    Forecast FCFF, final year
    CHF 806.2m
    Capex at depreciation, working capital in reinvestment
    CHF 644.2m
    Less reinvestment at g/ROIC (37.1% of NOPAT)
    CHF -238.9m
    Capitalised
    CHF 405.3m
    ROIC (reported)
    6.7%
    Terminal value, undiscounted
    CHF 19.7bn
    Terminal value, discounted
    CHF 16.0bn
    Enterprise value
    CHF 21.8bn
    Less net debt
    CHF 3.3bn
    Equity value
    CHF 18.6bn

    Exit at 11.4x EBITDA

    Value per shareCHF 25.23

    66% of EV

    Terminal value, undiscounted
    CHF 14.1bn
    Terminal value, discounted
    CHF 11.5bn
    Enterprise value
    CHF 17.3bn
    Less net debt
    CHF 3.3bn
    Equity value
    CHF 14.0bn

    Spread between methods: 28%.

    Sensitivity

    Value per share (CHF) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    2.61%78.29125.93591.55——
    3.61%41.7348.7862.1197.02438.06
    4.61%28.5830.5733.4838.1446.93
    5.61%21.7722.3823.1624.2125.74
    6.61%17.5917.6917.8017.9318.07

    Outlined: this model. Green text: above today's price of 67.56. 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-18.6%-6.3%+12.3pp
    EBIT margin13.5%25.9%+12.3pp
    Discount rate4.6%3.5%-1.1pp
    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.