B3
Forecast Builder
See the case as three statements, year by year, and change the growth, margin and fade that every valuation tool then uses.
Learning focus: A valuation is only a forecast with a discount rate on it, and a forecast should fade toward a growth rate the company can keep up.
Case file
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Forecast changes
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Value per share
$47.33
Forecast years
5
Revenue growth per year
3.54%
Final EBIT margin
13.08%
Final ROE
17.21%
Balance sheet balances
Yes
Income statement
| $m | Y10 | F1 | F2 | F3 | F4 | F5 | Stable |
|---|---|---|---|---|---|---|---|
| Revenue | 2,857.0 | 2,959.9 | 3,066.4 | 3,173.7 | 3,284.8 | 3,399.8 | 3,518.8 |
| Cost of goods sold | 1,827.8 | 1,894.3 | 1,962.5 | 2,031.2 | 2,102.3 | 2,175.9 | 2,252.0 |
| SG&A | 542.8 | 562.4 | 582.6 | 603.0 | 624.1 | 646.0 | 668.6 |
| Depreciation | 110.7 | 114.9 | 119.3 | 123.8 | 128.5 | 133.3 | 138.3 |
| EBIT | 375.7 | 388.3 | 402.0 | 415.7 | 429.9 | 444.6 | 459.9 |
| Net interest | 41.6 | 44.0 | 45.5 | 47.2 | 48.8 | 50.5 | 52.3 |
| Tax | 80.2 | 82.6 | 85.5 | 88.4 | 91.5 | 94.6 | 97.8 |
| Net income | 253.9 | 261.7 | 270.9 | 280.1 | 289.6 | 299.5 | 309.8 |
| Revenue growth | 4.4% | 3.6% | 3.6% | 3.5% | 3.5% | 3.5% | 3.5% |
| Real revenue growth | 2.4% | 1.6% | 1.6% | 1.5% | 1.5% | 1.5% | 1.5% |
| EBIT margin | 13.2% | 13.1% | 13.1% | 13.1% | 13.1% | 13.1% | 13.1% |
Balance sheet
| $m | Y10 | F1 | F2 | F3 | F4 | F5 | Stable |
|---|---|---|---|---|---|---|---|
| Cash | 150.8 | 150.8 | 150.8 | 150.8 | 150.8 | 150.8 | 150.8 |
| Receivables | 430.5 | 446.0 | 462.1 | 478.2 | 495.0 | 512.3 | 530.2 |
| Inventory | 350.5 | 363.3 | 376.4 | 389.5 | 403.2 | 417.3 | 431.9 |
| PP&E | 1,795.6 | 1,864.2 | 1,935.0 | 2,007.9 | 2,083.1 | 2,160.6 | 2,236.2 |
| Payables | 200.3 | 207.6 | 215.1 | 222.6 | 230.4 | 238.5 | 246.8 |
| Debt | 1,030.0 | 1,061.7 | 1,094.4 | 1,127.5 | 1,161.7 | 1,197.0 | 1,233.7 |
| Equity | 1,497.1 | 1,555.0 | 1,614.7 | 1,676.4 | 1,740.0 | 1,805.5 | 1,868.6 |
Cash flow
| $m | Y10 | F1 | F2 | F3 | F4 | F5 | Stable |
|---|---|---|---|---|---|---|---|
| Cash from operations | 339.9 | 355.6 | 368.5 | 382.1 | 395.5 | 409.5 | 423.9 |
| Capex | 177.1 | 183.5 | 190.1 | 196.8 | 203.7 | 210.8 | 213.9 |
| Net borrowing | 45.0 | 31.7 | 32.8 | 33.0 | 34.2 | 35.4 | 36.6 |
| FCFE | 207.8 | 203.7 | 211.2 | 218.3 | 226.1 | 234.1 | 246.6 |
Per share
| $m | Y10 | F1 | F2 | F3 | F4 | F5 | Stable |
|---|---|---|---|---|---|---|---|
| Shares (millions) | 97.14 | 97.14 | 97.14 | 97.14 | 97.14 | 97.14 | 97.14 |
| EPS | 2.61 | 2.69 | 2.79 | 2.88 | 2.98 | 3.08 | 3.19 |