DCF Studio

    SEB-A.ST · STO · Financial Services

    Skandinaviska Enskilda Banken AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 31.29

    Market price

    SEK 227.80

    Implied upside

    -86.3%

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

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 25.0x 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 31.29-86.3%
    Exit multiple
    SEK 228.51+0.3%
    Market price
    SEK 227.80

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn23bn46bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 81.8bnSEK 86.8bnSEK 92.1bnSEK 97.8bnSEK 103.8bn+6.1%
    EBITSEK 44.8bnSEK 47.6bnSEK 50.5bnSEK 53.6bnSEK 56.9bn+6.1%
    NOPATSEK 35.7bnSEK 37.8bnSEK 40.2bnSEK 42.6bnSEK 45.2bn+6.1%
    Add depreciation & amortisationSEK 2.3bnSEK 2.4bnSEK 2.6bnSEK 2.7bnSEK 2.9bn+6.1%
    Less capital expenditureSEK -1.2bnSEK -1.3bnSEK -1.4bnSEK -1.5bnSEK -1.6bn+6.1%
    Less increase in working capitalSEK -294.5mSEK -312.6mSEK -331.7mSEK -352.1mSEK -373.7m+6.1%
    Free cashflow to firmSEK 36.4bnSEK 38.6bnSEK 41.0bnSEK 43.5bnSEK 46.2bn+6.1%
    Discount factor0.96630.90240.84270.78690.7348-
    Present valueSEK 35.2bnSEK 34.9bnSEK 34.5bnSEK 34.2bnSEK 33.9bn-0.9%
    Present Value Of The ForecastSEK 172.7bn

    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
    Beta0.620Reported 0.433, pulled toward 1.0 (Blume)
    Cost of equity8.23%Risk-free + beta x equity risk premium
    Cost of debt8.19%Interest expense / average total debt
    Market capitalisationSEK 443.1bn33.2% of capital
    Total debtSEK 890.5bn66.8% of capital, book value as a proxy
    Tax rate20.4%Effective, capped at statutory
    WACC7.09%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 31.29

    74% of EV

    Forecast FCFF, final year
    SEK 46.2bn
    Capex at depreciation, working capital in reinvestment
    SEK 45.2bn
    Less reinvestment at g/ROIC (35.3% of NOPAT)
    SEK -16.0bn
    Capitalised
    SEK 29.3bn
    ROIC (WACC floor)
    7.1%
    Terminal value, undiscounted
    SEK 654.4bn
    Terminal value, discounted
    SEK 480.9bn
    Enterprise value
    SEK 653.6bn
    Less net debt
    SEK 590.6bn
    Equity value
    SEK 63.0bn

    Exit at 20.0x EBITDA

    Value per shareSEK 228.51

    84% of EV

    Terminal value, undiscounted
    SEK 1194.9bn
    Terminal value, discounted
    SEK 878.1bn
    Enterprise value
    SEK 1050.8bn
    Less net debt
    SEK 590.6bn
    Equity value
    SEK 460.2bn

    Spread between methods: 152%.

    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%
    5.09%155.23157.00158.76160.53162.30
    6.09%81.7083.1284.5385.9587.36
    7.09%28.9630.1231.2932.4533.62
    8.09%-10.72-9.74-8.76-7.78-6.80
    9.09%-41.64-40.80-39.97-39.13-38.30

    Outlined: this model. Green text: above today's price of 227.80. 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 year6.1%17.9%+11.8pp
    EBIT margin54.8%88.2%+33.4pp
    Discount rate7.1%4.4%-2.7pp
    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.