DCF Studio

    UNA.AS · AMS · Consumer Defensive

    Unilever PLC

    Also onConsensus Drift

    Implied value per share

    EUR 32.29

    Market price

    EUR 54.03

    Implied upside

    -40.2%

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

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

    Value Per Share

    Perpetuity growth
    EUR 32.29-40.2%
    Exit multiple
    EUR 33.37-38.2%
    Market price
    EUR 54.03

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn3bn7bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 47.7bnEUR 45.0bnEUR 42.5bnEUR 40.1bnEUR 37.8bn-5.6%
    EBITEUR 8.8bnEUR 8.3bnEUR 7.8bnEUR 7.4bnEUR 7.0bn-5.6%
    NOPATEUR 6.6bnEUR 6.2bnEUR 5.9bnEUR 5.5bnEUR 5.2bn-5.6%
    Add depreciation & amortisationEUR 1.3bnEUR 1.2bnEUR 1.1bnEUR 1.1bnEUR 1.0bn-5.6%
    Less capital expenditureEUR -1.4bnEUR -1.3bnEUR -1.3bnEUR -1.2bnEUR -1.1bn-5.6%
    Less increase in working capitalEUR 254.6mEUR 240.3mEUR 226.8mEUR 214.1mEUR 202.1m+5.6%
    Free cashflow to firmEUR 6.7bnEUR 6.3bnEUR 6.0bnEUR 5.6bnEUR 5.3bn-5.6%
    Discount factor0.96530.89940.83800.78080.7275-
    Present valueEUR 6.5bnEUR 5.7bnEUR 5.0bnEUR 4.4bnEUR 3.9bn-12.1%
    Present Value Of The ForecastEUR 25.5bn

    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
    Beta0.634Reported 0.453, pulled toward 1.0 (Blume)
    Cost of equity8.32%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 116.3bn80.8% of capital
    Total debtEUR 27.6bn19.2% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC7.33%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 32.29

    73% of EV

    Forecast FCFF, final year
    EUR 5.3bn
    Capex at depreciation, working capital in reinvestment
    EUR 5.2bn
    Less reinvestment at g/ROIC (15.9% of NOPAT)
    EUR -829.8m
    Capitalised
    EUR 4.4bn
    ROIC (reported)
    15.8%
    Terminal value, undiscounted
    EUR 93.5bn
    Terminal value, discounted
    EUR 68.0bn
    Enterprise value
    EUR 93.5bn
    Less net debt
    EUR 22.6bn
    Equity value
    EUR 70.9bn

    Exit at 12.1x EBITDA

    Value per shareEUR 33.37

    73% of EV

    Terminal value, undiscounted
    EUR 96.7bn
    Terminal value, discounted
    EUR 70.4bn
    Enterprise value
    EUR 95.8bn
    Less net debt
    EUR 22.6bn
    Equity value
    EUR 73.3bn

    Spread between methods: 3%.

    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%
    5.33%47.1052.3359.3869.4484.97
    6.33%35.9738.7842.3246.8953.07
    7.33%28.6530.3032.2934.7337.79
    8.33%23.4524.4925.6927.1128.82
    9.33%19.5720.2521.0121.8822.90

    Outlined: this model. Green text: above today's price of 54.03. 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-5.6%3.9%+9.5pp
    EBIT margin18.4%27.9%+9.5pp
    Discount rate7.3%5.6%-1.7pp
    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.