DCF Studio

    SU.PA · PAR · Industrials

    Schneider Electric S.E.

    Also onConsensus Drift

    Implied value per share

    EUR 127.57

    Market price

    EUR 285.75

    Implied upside

    -55.4%

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

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

    Current EV/EBITDA of 20.1x 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
    EUR 127.57-55.4%
    Exit multiple
    EUR 282.06-1.3%
    Market price
    EUR 285.75

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn3bn6bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 42.4bnEUR 44.7bnEUR 47.2bnEUR 49.8bnEUR 52.5bn+5.5%
    EBITEUR 7.2bnEUR 7.6bnEUR 8.0bnEUR 8.4bnEUR 8.9bn+5.5%
    NOPATEUR 5.5bnEUR 5.8bnEUR 6.1bnEUR 6.4bnEUR 6.8bn+5.5%
    Add depreciation & amortisationEUR 1.8bnEUR 1.8bnEUR 2.0bnEUR 2.1bnEUR 2.2bn+5.5%
    Less capital expenditureEUR -1.5bnEUR -1.6bnEUR -1.7bnEUR -1.8bnEUR -1.9bn+5.5%
    Less increase in working capitalEUR -683.9mEUR -721.7mEUR -761.5mEUR -803.5mEUR -847.8m+5.5%
    Free cashflow to firmEUR 5.0bnEUR 5.3bnEUR 5.6bnEUR 5.9bnEUR 6.2bn+5.5%
    Discount factor0.95750.87790.80490.73790.6766-
    Present valueEUR 4.8bnEUR 4.6bnEUR 4.5bnEUR 4.3bnEUR 4.2bn-3.3%
    Present Value Of The ForecastEUR 22.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta1.100Reported 1.149, pulled toward 1.0 (Blume)
    Cost of equity9.80%Risk-free + beta x equity risk premium
    Cost of debt3.30%Interest expense / average total debt
    Market capitalisationEUR 161.0bn90.0% of capital
    Total debtEUR 17.9bn10.0% of capital, book value as a proxy
    Tax rate23.7%Effective, capped at statutory
    WACC9.07%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 shareEUR 127.57

    74% of EV

    Forecast FCFF, final year
    EUR 6.2bn
    Capex at depreciation, working capital in reinvestment
    EUR 7.6bn
    Less reinvestment at g/ROIC (21.7% of NOPAT)
    EUR -1.6bn
    Capitalised
    EUR 5.9bn
    ROIC (reported)
    11.5%
    Terminal value, undiscounted
    EUR 92.5bn
    Terminal value, discounted
    EUR 62.6bn
    Enterprise value
    EUR 85.0bn
    Less net debt
    EUR 13.2bn
    Equity value
    EUR 71.7bn

    Exit at 20.0x EBITDA

    Value per shareEUR 282.06

    87% of EV

    Terminal value, undiscounted
    EUR 220.9bn
    Terminal value, discounted
    EUR 149.4bn
    Enterprise value
    EUR 171.8bn
    Less net debt
    EUR 13.2bn
    Equity value
    EUR 158.6bn

    Spread between methods: 75%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.07%175.04182.74192.03203.50218.05
    8.07%144.76149.04154.02159.90166.97
    9.07%122.50124.89127.57130.64134.18
    10.07%105.46106.73108.11109.64111.34
    11.07%91.9992.5893.1993.8394.50

    Outlined: this model. Green text: above today's price of 285.75. 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 year5.5%25.8%+20.3pp
    EBIT margin16.9%35.5%+18.7pp
    Discount rate9.1%5.7%-3.4pp
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.