DCF Studio

    SCA-B.ST · STO · Basic Materials

    Svenska Cellulosa Aktiebolaget SCA (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 64.33

    Market price

    SEK 120.45

    Implied upside

    -46.6%

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

    AdjustedCapital expenditure runs at 17.6% of revenue against depreciation of 9.8%. 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.

    Value Per Share

    Perpetuity growth
    SEK 64.33-46.6%
    Exit multiple
    SEK 117.71-2.3%
    Market price
    SEK 120.45

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 20.3bnSEK 20.2bnSEK 20.1bnSEK 19.9bnSEK 19.8bn-0.6%
    EBITSEK 5.7bnSEK 5.7bnSEK 5.6bnSEK 5.6bnSEK 5.6bn-0.6%
    NOPATSEK 4.6bnSEK 4.6bnSEK 4.5bnSEK 4.5bnSEK 4.5bn-0.6%
    Add depreciation & amortisationSEK 2.0bnSEK 2.0bnSEK 2.0bnSEK 2.0bnSEK 1.9bn-0.6%
    Less capital expenditureSEK -3.6bnSEK -3.6bnSEK -3.5bnSEK -3.5bnSEK -3.5bn-0.6%
    Less increase in working capitalSEK 58.4mSEK 58.1mSEK 57.8mSEK 57.4mSEK 57.1m+0.6%
    Free cashflow to firmSEK 3.1bnSEK 3.0bnSEK 3.0bnSEK 3.0bnSEK 3.0bn-0.6%
    Discount factor0.96510.89900.83740.78000.7265-
    Present valueSEK 3.0bnSEK 2.7bnSEK 2.5bnSEK 2.3bnSEK 2.2bn-7.4%
    Present Value Of The ForecastSEK 12.7bn

    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
    Beta0.584Reported 0.379, pulled toward 1.0 (Blume)
    Cost of equity8.00%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationSEK 84.6bn86.2% of capital
    Total debtSEK 13.5bn13.8% of capital, book value as a proxy
    Tax rate19.7%Effective, capped at statutory
    WACC7.36%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 64.33

    78% of EV

    Forecast FCFF, final year
    SEK 3.0bn
    Capex at depreciation, working capital in reinvestment
    SEK 4.5bn
    Less reinvestment at g/ROIC (34.0% of NOPAT)
    SEK -1.5bn
    Capitalised
    SEK 3.0bn
    ROIC (WACC floor)
    7.4%
    Terminal value, undiscounted
    SEK 62.5bn
    Terminal value, discounted
    SEK 45.4bn
    Enterprise value
    SEK 58.1bn
    Less net debt
    SEK 13.0bn
    Equity value
    SEK 45.2bn

    Exit at 15.2x EBITDA

    Value per shareSEK 117.71

    87% of EV

    Terminal value, undiscounted
    SEK 114.0bn
    Terminal value, discounted
    SEK 82.9bn
    Enterprise value
    SEK 95.6bn
    Less net debt
    SEK 13.0bn
    Equity value
    SEK 82.6bn

    Spread between methods: 59%.

    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%
    5.36%96.1896.6597.1297.5998.06
    6.36%77.3577.7378.1278.5078.88
    7.36%63.6964.0164.3364.6464.96
    8.36%53.3453.6153.8854.1454.41
    9.36%45.2445.4745.6945.9246.15

    Outlined: this model. Green text: above today's price of 120.45. 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-0.6%13.0%+13.6pp
    EBIT margin28.2%45.4%+17.2pp
    Discount rate7.4%4.5%-2.9pp
    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.