Royal Unibrew A/S - værdiansættelse og følsomhedsanalyse gennem simulation

Studenteropgave: Bachelor


  • Kåre Paamand
5. semester, HA erhvervsøkonomi (Bacheloruddannelse)
The overall purpose of the present thesis was to determine the share price of the publicly traded brewery Royal Unibrew A/S and challenge it through simulation. This thesis found that the baseline theoretical price was DKK 297,14. Consequently, the conclusion of the initial calculation was that the market overvalued the stock by 7,16 %, compared to the price listed on Nasdaq Copenhagen the 6th October 2016 at DKK 320,10. The Monte-Carlo simulation led to a median share price of DKK 313,66, when allowing stochastic variation in all the parameters. Whereas the sensitivity report indicated that the theoretical stock value was most sensitive to differences in the terminal value of the profit- and the asset turnover-ratio along with the beta value. As mentioned the purpose was twofold. Firstly, the baseline theoretical share price was determined using the enterprise discounted cash flow model (DCF-model). This model discounts the free cash flows available to all investors with the weighted average cost of capital (WACC) as the discount factor. The DCF-approach to valuation is chosen as it remains the favourite among practitioners and academics due to the fact that it relies solely on the flow of cash in and out of the company, rather than accounting-based earnings. Secondly, the aim was through a thorough investigation and simulation of the components in the DCF-model to clarify the impact of those parameters in the valuation of the brewery. The impact on the sensitivity of the share price was assessed through the Monte-Carlo method, as it was an accessible way of challenging the share price value through a process that cannot easily be predicted due to the intervention of random variables. Royal Unibrew A/S has been through an exciting development throughout the last decade. During the recent global financial crisis in the late twenty-hundreds the company was on the brink of bankruptcy, whereas they later became acknowledged as the best performing publicly traded Danish company since their low in 2008. The thesis starts with a strategic analysis with the purpose of locating and assessing the non-financial drivers and an analysis of the macro environment surrounding the brewery. The analysis finds that the primary risks and concerns Royal Unibrew is facing, are a decline in overall beer consumption, an augmented public focus on health as well as increasing commodity prices over time. On the other hand, the analysis also seeks to Side 2 af 75 uncover the strengths and opportunities of Royal Unibrew. They are primarily located in the possession of an effective and agile production chain, a solid market position in Denmark and Finland, along with their primary countries of operations are predicted to experience a significant growth in GDP towards 2021. Furthermore, the analysis recognizes Royal Unibrew’s ability under the latest executive board to successfully acquire and streamline the value chain of the Finish brewery Oy Hartwall Ab – acquired in 2013 from Heineken B.V. for DKK 2,3 billion. Royal Unibrew managed to increase the EBITmargin with 1,9 percentage points in the first full year of operating the brewery compared to the proforma financial statement of 2012. However, the net revenue obtained in Finland decreased 5 % from 2014 to 2015 due to several factors including legislative restrictions in marketing in the country, restraint in the private expenditure and extraordinary poor weather conditions. It is therefore considered a tough task for Royal Unibrew to reverse the advancement in the region, though manageable on the medium to long run substantiated by Royal Unibrews experience and effective nature of operations. Following the strategic analysis is a complete decomposition of the financial drivers of Royal Unibrew during the past 5 years. The decomposition’s point of reference is from elements in the DuPont-pyramid, where the primary result is a return on invested capital (ROIC) in 2015 of 17,46 % - a 2,47 percentage point increase from 2014. The decomposition reveals a positive trend in Return on Equity (ROE) and ROIC from the turnaround of the company until 2012. Contrary the returns experienced a percentage decrease in the financial year after the acquisition of Hartwall as well as the following year. Nevertheless, after a successful cost reduction and optimization process Royal Unibrew A/S increased ROIC again in 2015. After the WACC has been determined through various calculations, estimates and assumptions, the strategic and financial analysis leads to the forecast of Royal Unibrews future performance. These forecasted figures are then discounted as stated in the first section of the executive summary, which yields the theoretical value
Udgivelsesdato16 dec. 2016
Antal sider 75
Udgivende institutAarhus University. BSS. Department of Economics and Business Economics

ID: 108618779