DCF Studio

    WKL.AS · AMS · Industrials

    Wolters Kluwer N.V.

    Also onConsensus Drift

    Implied value per share

    EUR 162.32

    Market price

    EUR 68.16

    Implied upside

    +138.1%

    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 162.32+138.1%
    Exit multiple
    EUR 86.02+26.2%
    Market price
    EUR 68.16

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 6.4bnEUR 6.6bnEUR 6.9bnEUR 7.2bnEUR 7.4bn+3.9%
    EBITEUR 1.6bnEUR 1.7bnEUR 1.7bnEUR 1.8bnEUR 1.9bn+3.9%
    NOPATEUR 1.3bnEUR 1.3bnEUR 1.4bnEUR 1.4bnEUR 1.5bn+3.9%
    Add depreciation & amortisationEUR 494.0mEUR 513.5mEUR 533.8mEUR 554.9mEUR 576.8m+3.9%
    Less capital expenditureEUR -342.2mEUR -355.7mEUR -369.8mEUR -384.4mEUR -399.6m+3.9%
    Less increase in working capitalEUR 120.4mEUR 125.1mEUR 130.1mEUR 135.2mEUR 140.6m-3.9%
    Free cashflow to firmEUR 1.5bnEUR 1.6bnEUR 1.7bnEUR 1.7bnEUR 1.8bn+3.9%
    Discount factor0.97030.91340.85990.80960.7622-
    Present valueEUR 1.5bnEUR 1.5bnEUR 1.4bnEUR 1.4bnEUR 1.4bn-2.1%
    Present Value Of The ForecastEUR 7.2bn

    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
    Beta0.457Reported 0.189, pulled toward 1.0 (Blume)
    Cost of equity7.17%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 15.2bn75.5% of capital
    Total debtEUR 4.9bn24.5% of capital, book value as a proxy
    Tax rate21.2%Effective, capped at statutory
    WACC6.22%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 162.32

    83% of EV

    Forecast FCFF, final year
    EUR 1.8bn
    Capex at depreciation, working capital in reinvestment
    EUR 1.9bn
    Less reinvestment at g/ROIC (11.5% of NOPAT)
    EUR -212.7m
    Capitalised
    EUR 1.6bn
    ROIC (reported)
    21.8%
    Terminal value, undiscounted
    EUR 45.2bn
    Terminal value, discounted
    EUR 34.4bn
    Enterprise value
    EUR 41.6bn
    Less net debt
    EUR 4.0bn
    Equity value
    EUR 37.6bn

    Exit at 8.9x EBITDA

    Value per shareEUR 86.02

    70% of EV

    Terminal value, undiscounted
    EUR 22.0bn
    Terminal value, discounted
    EUR 16.8bn
    Enterprise value
    EUR 23.9bn
    Less net debt
    EUR 4.0bn
    Equity value
    EUR 19.9bn

    Spread between methods: 61%.

    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%
    4.22%245.75292.03365.11497.89814.52
    5.22%175.96197.32226.48268.70335.35
    6.22%135.72147.46162.32181.75208.26
    7.22%109.55116.69125.32135.95149.41
    8.22%91.1595.80101.23107.67115.46

    Outlined: this model. Green text: above today's price of 68.16. 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 year3.9%-10.2%-14.2pp
    EBIT margin25.4%8.9%-16.5pp
    Discount rate6.2%10.6%+4.3pp
    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.