DCF Studio

    SAAB-B.ST · STO · Industrials

    Saab AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 501.77

    Market price

    SEK 603.60

    Implied upside

    -16.9%

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

    AdjustedCapital expenditure runs at 7.3% of revenue against depreciation of 4.4%. 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.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 30.4x 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 501.77-16.9%
    Exit multiple
    SEK 885.48+46.7%
    Market price
    SEK 603.60

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn4bn9bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 97.8bnSEK 120.7bnSEK 149.1bnSEK 184.2bnSEK 227.5bn+23.5%
    EBITSEK 8.5bnSEK 10.6bnSEK 13.0bnSEK 16.1bnSEK 19.9bn+23.5%
    NOPATSEK 6.8bnSEK 8.4bnSEK 10.4bnSEK 12.8bnSEK 15.8bn+23.5%
    Add depreciation & amortisationSEK 4.3bnSEK 5.3bnSEK 6.5bnSEK 8.0bnSEK 9.9bn+23.5%
    Less capital expenditureSEK -7.1bnSEK -8.8bnSEK -10.8bnSEK -13.4bnSEK -16.5bn+23.5%
    Less increase in working capitalSEK -166.6mSEK -205.8mSEK -254.2mSEK -314.0mSEK -387.8m+23.5%
    Free cashflow to firmSEK 3.8bnSEK 4.7bnSEK 5.8bnSEK 7.1bnSEK 8.8bn+23.5%
    Discount factor0.96960.91160.85710.80580.7576-
    Present valueSEK 3.7bnSEK 4.3bnSEK 5.0bnSEK 5.8bnSEK 6.7bn+16.1%
    Present Value Of The ForecastSEK 25.3bn

    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
    Beta0.352Reported 0.033, pulled toward 1.0 (Blume)
    Cost of equity6.49%Risk-free + beta x equity risk premium
    Cost of debt4.54%Interest expense / average total debt
    Market capitalisationSEK 325.1bn95.7% of capital
    Total debtSEK 14.7bn4.3% of capital, book value as a proxy
    Tax rate20.6%Effective, capped at statutory
    WACC6.36%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 shareSEK 501.77

    91% of EV

    Forecast FCFF, final year
    SEK 8.8bn
    Capex at depreciation, working capital in reinvestment
    SEK 16.4bn
    Less reinvestment at g/ROIC (25.7% of NOPAT)
    SEK -4.2bn
    Capitalised
    SEK 12.2bn
    ROIC (reported)
    9.7%
    Terminal value, undiscounted
    SEK 323.2bn
    Terminal value, discounted
    SEK 244.9bn
    Enterprise value
    SEK 270.2bn
    Less net debt
    SEK -649.0m
    Equity value
    SEK 270.9bn

    Exit at 20.0x EBITDA

    Value per shareSEK 885.48

    95% of EV

    Terminal value, undiscounted
    SEK 596.6bn
    Terminal value, discounted
    SEK 452.0bn
    Enterprise value
    SEK 477.3bn
    Less net debt
    SEK -649.0m
    Equity value
    SEK 478.0bn

    Spread between methods: 55%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.36%801.93909.831074.911360.071973.75
    5.36%582.82627.77687.99773.17903.37
    6.36%454.26475.43501.77535.59580.81
    7.36%369.90380.22392.44407.19425.47
    8.36%310.41315.21320.65326.89334.20

    Outlined: this model. Green text: above today's price of 603.60. 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 year23.5%28.3%+4.8pp
    EBIT margin8.7%10.5%+1.7pp
    Discount rate6.4%5.7%-0.6pp
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    Yahoo Finance and RBA data. General information, not advice. Methodology.