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Slide 5, how can it be Approximately 452 employees? It's approx 450 or exactly 452 but gotta make a choice there mate
Oh thanks a lot. I'm a new bee let me know what you think about the rest of the slides
Bump!
slide 4 "1 month" is upside down and looks weird
It's in Sync with the rest of the wording
For slide 13, not sure if you meant to have your COGS numbers in bold
The spacing before the first sentence on slide 9 is also inconsistent when you look at the the 2 textboxes side by side
Anything on the content?
Oh...yes thanks
The presentation is attached
In slide 13 you have a comment saying that a loan payment affected 2017 ebitda, how come?
loan payment was classified as non-overhead expenses
well, as far as i know, non operational expenses shouldnt be in ebitda, but maybe you have some different accounting standard
you can make a 2017 pro-forma ebitda, including this 53, to show the ebitda is growing
the company accounted for it like that but i agree
The 3% perpetuity growth rate of FCFF(!) assumed for the terminal value are very optimistic, given that revenue(!) CAGR for the past 3 years was only 2% p.a. This suggests not only considerable revenue growth for the TV, but also margin expansion. If you feel more comfortable extending your forecast period, do so, but the TV should really not violate steady state conditions for mature companies.
I'd soft-pedal this a lot - it should be lower than your cash flow growth during your forecasting period. Didn't dive into it too deeply, but maybe something like 1.5% is more realistic (really though, you will need to decide that and think about what is a sound assumption)
I get your points, but any reason why it should be lower than the cash flow growth during forecasting period?
Yes, the reason is quite simple:
TV has a tremendous impact on overall EV. It often contributes ~50% to EV and is extremely driven by the TV growth rate. Why? Because we are talking about perpetuity here. A repeating cashflow that comes in forever, year by year. Of course, the discount rate will work against it and diminish the value of the cash flows as we continuously progress in time, but still, the ~50% contribution to EV (depending on how far you forecast, what your growth rate is) can severely damage the validity of your model.
It should be lower, because it makes no sense that the cash flows of a business will grow slowly (relatively) for 5 years, only to grow faster in perpetuity suddenly, as if someone shot the starting pistol at a race. This is a question of internal consistency, not a scenario based decision.
What we should strive for is an operating model that converges to a "steady-state", a phase where the business is able to reliably carry itself and exhibits modest growth (company already harvested its growth potential in the forecast years).
This will
- A) allow us to model scenarios within the forecast years - B) decrease error frequency in TV assumptions since "steady state" is assumed to be forecasted more easily than non-steady-state.
Sidenote: Of course it is possible that the next 5 years might be bad in terms of growth, but then you would model a few years extra, where growth picks up (if you REALLY want to model this scenario), and not just increase the perpetuity growth rate.
Perfect, I was already bench-marking this against a recent listing that had 6% for growth. I thought I was rather cautious with my 3%.
6% is A LOT. As mentioned in my response above, one might want to think about extending the forecast period rather than making flat-out perpetuity assumptions that possess a huge lever in TV calculations
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