DCF Studio

    SIKA.SW · EBS · Basic Materials

    Sika AG

    Also onConsensus Drift

    Implied value per share

    CHF 189.57

    Market price

    CHF 182.45

    Implied upside

    +3.9%

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

    NoteRisk-free rate is an assumption: CHF assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CHF 189.57+3.9%
    Exit multiple
    CHF 197.86+8.4%
    Market price
    CHF 182.45

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CHF). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCHF
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCHF 11.4bnCHF 11.7bnCHF 12.0bnCHF 12.2bnCHF 12.5bn+2.2%
    EBITCHF 1.6bnCHF 1.7bnCHF 1.7bnCHF 1.7bnCHF 1.8bn+2.2%
    NOPATCHF 1.4bnCHF 1.4bnCHF 1.5bnCHF 1.5bnCHF 1.5bn+2.2%
    Add depreciation & amortisationCHF 504.7mCHF 515.8mCHF 527.2mCHF 538.8mCHF 550.7m+2.2%
    Less capital expenditureCHF -327.1mCHF -334.3mCHF -341.7mCHF -349.2mCHF -356.9m+2.2%
    Less increase in working capitalCHF -21.8mCHF -22.3mCHF -22.8mCHF -23.3mCHF -23.8m+2.2%
    Free cashflow to firmCHF 1.5bnCHF 1.6bnCHF 1.6bnCHF 1.6bnCHF 1.7bn+2.2%
    Discount factor0.97110.91570.86350.81430.7679-
    Present valueCHF 1.5bnCHF 1.4bnCHF 1.4bnCHF 1.3bnCHF 1.3bn-3.6%
    Present Value Of The ForecastCHF 7.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate0.50%CHF assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta1.133Reported 1.199, pulled toward 1.0 (Blume)
    Cost of equity6.73%Risk-free + beta x equity risk premium
    Cost of debt2.81%Interest expense / average total debt
    Market capitalisationCHF 29.3bn84.1% of capital
    Total debtCHF 5.5bn15.9% of capital, book value as a proxy
    Tax rate15.0%Effective, capped at statutory
    WACC6.04%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 shareCHF 189.57

    80% of EV

    Forecast FCFF, final year
    CHF 1.7bn
    Capex at depreciation, working capital in reinvestment
    CHF 1.6bn
    Less reinvestment at g/ROIC (21.3% of NOPAT)
    CHF -343.1m
    Capitalised
    CHF 1.3bn
    ROIC (reported)
    11.7%
    Terminal value, undiscounted
    CHF 36.7bn
    Terminal value, discounted
    CHF 28.2bn
    Enterprise value
    CHF 35.1bn
    Less net debt
    CHF 4.7bn
    Equity value
    CHF 30.4bn

    Exit at 16.5x EBITDA

    Value per shareCHF 197.86

    81% of EV

    Terminal value, undiscounted
    CHF 38.4bn
    Terminal value, discounted
    CHF 29.5bn
    Enterprise value
    CHF 36.5bn
    Less net debt
    CHF 4.7bn
    Equity value
    CHF 31.8bn

    Spread between methods: 4%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.04%308.40363.82454.91632.891137.32
    5.04%216.06238.73270.19316.86393.55
    6.04%164.29175.40189.57208.27234.20
    7.04%131.13137.11144.32153.25164.60
    8.04%108.07111.42115.32119.93125.49

    Outlined: this model. Green text: above today's price of 182.45. 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 year2.2%1.4%-0.8pp
    EBIT margin14.3%13.8%-0.5pp
    Discount rate6.0%6.2%+0.1pp
    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.