DCF Studio

    SLHN.SW · EBS · Financial Services

    Swiss Life Holding AG

    Also onConsensus Drift

    Implied value per share

    CHF 8007.92

    Market price

    CHF 924.20

    Implied upside

    +766.5%

    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.
    AdjustedConsensus rests on as few as 2 analyst estimate(s).
    AdjustedReported capital expenditure averages just 0.68% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.
    AdjustedCapital expenditure runs at 1.0% of revenue against depreciation of 0.6%. 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.
    NoteRisk-free rate is an assumption: CHF assumption - no free live source available for this market.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    CHF 8007.92+766.5%
    Exit multiple
    CHF 3167.58+242.7%
    Market price
    CHF 924.20

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CHF). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCHF
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCHF 21.4bnCHF 25.6bnCHF 30.8bnCHF 36.9bnCHF 44.3bn+20.0%
    EBITCHF 2.2bnCHF 2.7bnCHF 3.2bnCHF 3.8bnCHF 4.6bn+20.0%
    NOPATCHF 1.9bnCHF 2.3bnCHF 2.7bnCHF 3.3bnCHF 3.9bn+20.0%
    Add depreciation & amortisationCHF 127.8mCHF 153.4mCHF 184.0mCHF 220.8mCHF 265.0m+20.0%
    Less capital expenditureCHF -213.6mCHF -256.3mCHF -307.5mCHF -369.0mCHF -442.9m+20.0%
    Less increase in working capitalCHF 24.8mCHF 29.7mCHF 35.6mCHF 42.8mCHF 51.3m-20.0%
    Free cashflow to firmCHF 1.8bnCHF 2.2bnCHF 2.6bnCHF 3.2bnCHF 3.8bn+20.0%
    Discount factor0.98110.94430.90900.87490.8421-
    Present valueCHF 1.8bnCHF 2.1bnCHF 2.4bnCHF 2.8bnCHF 3.2bn+15.5%
    Present Value Of The ForecastCHF 12.2bn

    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
    Beta0.683Reported 0.527, pulled toward 1.0 (Blume)
    Cost of equity4.26%Risk-free + beta x equity risk premium
    Cost of debt3.45%Interest expense / average total debt
    Market capitalisationCHF 25.8bn72.4% of capital
    Total debtCHF 9.9bn27.6% of capital, book value as a proxy
    Tax rate15.0%Effective, capped at statutory
    WACC3.89%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 8007.92

    93% of EV

    Forecast FCFF, final year
    CHF 3.8bn
    Capex at depreciation, working capital in reinvestment
    CHF 3.9bn
    Less reinvestment at g/ROIC (30.0% of NOPAT)
    CHF -1.2bn
    Capitalised
    CHF 2.7bn
    ROIC (reported)
    8.3%
    Terminal value, undiscounted
    CHF 201.7bn
    Terminal value, discounted
    CHF 169.8bn
    Enterprise value
    CHF 182.0bn
    Less net debt
    CHF -44.7bn
    Equity value
    CHF 226.7bn

    Exit at 8.0x EBITDA

    Value per shareCHF 3167.58

    73% of EV

    Terminal value, undiscounted
    CHF 38.9bn
    Terminal value, discounted
    CHF 32.8bn
    Enterprise value
    CHF 45.0bn
    Less net debt
    CHF -44.7bn
    Equity value
    CHF 89.7bn

    Spread between methods: 87%.

    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%
    1.89%29008.20————
    2.89%9289.3912585.7424274.67——
    3.89%6058.686777.608008.0010610.1119834.11
    4.89%4733.014985.785341.435881.536804.86
    5.89%4011.114114.414246.294421.554667.40

    Outlined: this model. Green text: above today's price of 924.20. 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
    EBIT margin10.4%-14.9%-25.3pp
    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.