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Discounted Cash Flow (DCF) Analysis Unlevered


Markel Corporation

Markel Corporation (MKL)

Financial Services

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 4,323.085,133.665,369.815,611.996,061.516,841.027,508.028,240.059,043.459,925.1910,892.90
Revenue (%)
EBITDA 663.16758.761,055.17948.99418.24376.26989.561,086.041,191.931,308.141,435.68
EBITDA (%)
EBIT 472.95554.95854.34754.81214.58148.45711.01780.33856.42939.921,031.56
EBIT (%)
Depreciation 190.22203.81200.83194.17203.67227.81278.55305.71335.51368.22404.13
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash --4,712.544,421.124,661.913,473.875,522.906,061.386,652.367,300.978,012.81
Total Cash (%)
Account Receivables 1,627.211,602.731,486.361,647.687,412.628,245.484,613.685,063.515,557.206,099.036,693.68
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 295.70276.19225.00231.21324.29337.26385.16422.71463.93509.16558.81
Accounts Payable (%)
Capital Expenditure -47.55-82.14-80.01-63.42-74.56-106.72-101.36-111.24-122.09-133.99-147.05
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 1,134.1
Diluted Shares Outstanding 13.88
Cost of Debt
Tax Rate -2,155.90
After-tax Cost of Debt 107.84
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.24
Total Debt 2,721.00
Total Equity 15,746.58
Total Capital 18,467.58
Debt Weighting 14.73
Equity Weighting 85.27
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 4,323.085,133.665,369.815,611.996,061.516,841.027,508.028,240.059,043.459,925.1910,892.90
EBITDA 663.16758.761,055.17948.99418.24376.26989.561,086.041,191.931,308.141,435.68
EBIT 472.95554.95854.34754.81214.58148.45711.01780.33856.42939.921,031.56
Tax Rate 21.70%26.65%20.79%27.11%-383.18%-2,155.90%-407.14%-407.14%-407.14%-407.14%-407.14%
EBIAT 370.30407.06676.72550.191,036.793,348.883,605.793,957.364,343.204,766.665,231.41
Depreciation 190.22203.81200.83194.17203.67227.81278.55305.71335.51368.22404.13
Accounts Receivable -24.48116.37-161.32-5,764.94-832.863,631.80-449.83-493.69-541.83-594.66
Inventories -----------
Accounts Payable --19.51-51.206.2293.0812.9747.9037.5541.2145.2349.64
Capital Expenditure -34.58-2.13-16.5911.1432.16-5.369.8810.8511.9013.06
UFCF 560.52650.42940.59572.67-4,420.262,788.967,558.683,860.664,237.084,650.195,103.59
WACC
PV UFCF 6,071.722,491.112,196.161,936.121,706.88
SUM PV UFCF 4,735.96

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 24.49
Free cash flow (t + 1) 5,307.73
Terminal Value 25,904.00
Present Value of Terminal Value 8,663.52

Intrinsic Value

Enterprise Value 13,399.49
Net Debt -752.87
Equity Value 14,152.36
Shares Outstanding 13.88
Equity Value Per Share 1,019.28