DCF Studio

    ORA.AX · ASX · Consumer Cyclical

    Orora Limited

    Also onConsensus Drift

    Implied value per share

    AUD -0.16

    Market price

    AUD 1.39

    Implied upside

    -111.2%

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

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedCapital expenditure runs at 7.9% of revenue against depreciation of 5.6%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    AUD -0.16-111.2%
    Exit multiple
    AUD 0.08-94.3%
    Market price
    AUD 1.39

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m42m83mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 1.8bnAUD 1.4bnAUD 1.2bnAUD 927.7mAUD 745.4m-19.7%
    EBITAUD 62.5mAUD 50.2mAUD 40.3mAUD 32.4mAUD 26.0m-19.7%
    NOPATAUD 46.7mAUD 37.5mAUD 30.2mAUD 24.2mAUD 19.5m-19.7%
    Add depreciation & amortisationAUD 100.7mAUD 80.9mAUD 65.0mAUD 52.2mAUD 42.0m-19.7%
    Less capital expenditureAUD -140.6mAUD -113.0mAUD -90.8mAUD -73.0mAUD -58.6m-19.7%
    Less increase in working capitalAUD 76.4mAUD 61.4mAUD 49.3mAUD 39.6mAUD 31.8m+19.7%
    Free cashflow to firmAUD 83.2mAUD 66.9mAUD 53.7mAUD 43.2mAUD 34.7m-19.7%
    Discount factor0.96650.90280.84330.78770.7358-
    Present valueAUD 80.4mAUD 60.4mAUD 45.3mAUD 34.0mAUD 25.5m-24.9%
    Present Value Of The ForecastAUD 245.6m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta0.597Reported 0.398, pulled toward 1.0 (Blume)
    Cost of equity8.93%Risk-free + beta x equity risk premium
    Cost of debt5.76%Interest expense / average total debt
    Market capitalisationAUD 1.7bn59.5% of capital
    Total debtAUD 1.2bn40.5% of capital, book value as a proxy
    Tax rate25.2%Effective, capped at statutory
    WACC7.06%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 shareAUD -0.16

    46% of EV

    Forecast FCFF, final year
    AUD 34.7m
    Capex at depreciation, working capital in reinvestment
    AUD 19.5m
    Less reinvestment at g/ROIC (35.4% of NOPAT)
    AUD -6.9m
    Capitalised
    AUD 12.6m
    ROIC (WACC floor)
    7.1%
    Terminal value, undiscounted
    AUD 282.9m
    Terminal value, discounted
    AUD 208.2m
    Enterprise value
    AUD 453.8m
    Less net debt
    AUD 646.8m
    Equity value
    AUD -193.0m

    Exit at 10.0x EBITDA

    Value per shareAUD 0.08

    67% of EV

    Terminal value, undiscounted
    AUD 678.9m
    Terminal value, discounted
    AUD 499.5m
    Enterprise value
    AUD 745.1m
    Less net debt
    AUD 646.8m
    Equity value
    AUD 98.3m

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.06%-0.06-0.06-0.06-0.06-0.06
    6.06%-0.12-0.12-0.12-0.11-0.11
    7.06%-0.16-0.16-0.16-0.15-0.15
    8.06%-0.19-0.19-0.19-0.18-0.18
    9.06%-0.21-0.21-0.21-0.21-0.21

    Outlined: this model. Green text: above today's price of 1.39. 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-19.7%44.6%+64.2pp
    EBIT margin3.5%22.9%+19.4pp
    Discount rate7.1%2.6%-4.5pp
    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.