DCF Studio

    KPN.AS · AMS · Communication Services

    Koninklijke KPN N.V.

    Also onConsensus Drift

    Implied value per share

    EUR 5.32

    Market price

    EUR 4.00

    Implied upside

    +32.9%

    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 5.32+32.9%
    Exit multiple
    EUR 4.69+17.3%
    Market price
    EUR 4.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 6.0bnEUR 6.1bnEUR 6.3bnEUR 6.5bnEUR 6.7bn+3.0%
    EBITEUR 1.4bnEUR 1.5bnEUR 1.5bnEUR 1.6bnEUR 1.6bn+3.0%
    NOPATEUR 1.1bnEUR 1.2bnEUR 1.2bnEUR 1.2bnEUR 1.3bn+3.0%
    Add depreciation & amortisationEUR 1.4bnEUR 1.4bnEUR 1.5bnEUR 1.5bnEUR 1.6bn+3.0%
    Less capital expenditureEUR -1.4bnEUR -1.4bnEUR -1.4bnEUR -1.5bnEUR -1.5bn+3.0%
    Less increase in working capitalEUR 60.7mEUR 62.5mEUR 64.4mEUR 66.3mEUR 68.2m-3.0%
    Free cashflow to firmEUR 1.2bnEUR 1.2bnEUR 1.3bnEUR 1.3bnEUR 1.4bn+3.0%
    Discount factor0.97080.91490.86230.81270.7659-
    Present valueEUR 1.2bnEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.0bn-3.0%
    Present Value Of The ForecastEUR 5.5bn

    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
    Beta0.495Reported 0.247, pulled toward 1.0 (Blume)
    Cost of equity7.42%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 15.1bn68.4% of capital
    Total debtEUR 7.0bn31.6% of capital, book value as a proxy
    Tax rate22.2%Effective, capped at statutory
    WACC6.11%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 5.32

    79% of EV

    Forecast FCFF, final year
    EUR 1.4bn
    Capex at depreciation, working capital in reinvestment
    EUR 1.3bn
    Less reinvestment at g/ROIC (22.7% of NOPAT)
    EUR -286.5m
    Capitalised
    EUR 973.3m
    ROIC (reported)
    11.0%
    Terminal value, undiscounted
    EUR 27.7bn
    Terminal value, discounted
    EUR 21.2bn
    Enterprise value
    EUR 26.7bn
    Less net debt
    EUR 6.4bn
    Equity value
    EUR 20.3bn

    Exit at 7.7x EBITDA

    Value per shareEUR 4.69

    77% of EV

    Terminal value, undiscounted
    EUR 24.5bn
    Terminal value, discounted
    EUR 18.8bn
    Enterprise value
    EUR 24.3bn
    Less net debt
    EUR 6.4bn
    Equity value
    EUR 17.9bn

    Spread between methods: 13%.

    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%
    4.11%9.0910.7313.4018.4531.84
    5.11%6.216.887.819.1711.37
    6.11%4.584.905.325.866.60
    7.11%3.523.703.904.154.47
    8.11%2.792.882.993.113.26

    Outlined: this model. Green text: above today's price of 4.00. 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 year3.0%-1.3%-4.3pp
    EBIT margin24.2%19.5%-4.6pp
    Discount rate6.1%7.0%+0.9pp
    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.