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Discounted Cash Flow (DCF) Analysis Unlevered


3M Company

3M Company (MMM)

Industrials

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 30,871.0031,821.8330,275.2930,108.7731,656.3632,764.3433,177.1733,595.2034,018.5034,447.1334,881.16
Revenue (%)
EBITDA 8,017.208,534.618,250.028,517.779,082.218,472.869,007.609,121.109,236.029,352.409,470.24
EBITDA (%)
EBIT 6,646.537,128.096,814.977,042.447,537.386,985.367,464.867,558.927,654.167,750.607,848.26
EBIT (%)
Depreciation 1,370.671,406.521,435.051,475.331,544.831,487.501,542.741,562.181,581.861,601.791,621.97
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 3,337.163,334.931,916.432,676.674,127.993,233.843,284.543,325.923,367.833,410.273,453.24
Total Cash (%)
Account Receivables 4,254.024,238.674,153.774,392.874,909.905,019.504,767.564,827.634,888.464,950.055,012.42
Account Receivables (%)
Inventories 3,865.053,707.243,517.993,384.234,033.024,367.494,040.984,091.904,143.454,195.664,248.53
Inventories (%)
Accounts Payable 1,799.781,807.481,695.421,797.491,943.702,267.291,997.272,022.432,047.912,073.722,099.85
Accounts Payable (%)
Capital Expenditure -1,537.38-1,358.79-1,428.99-1,360.92-1,323.24-1,313.85-1,476.38-1,494.99-1,513.82-1,532.90-1,552.21
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 155.46
Diluted Shares Outstanding 602.00
Cost of Debt
Tax Rate 23.43
After-tax Cost of Debt -1.12
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.87
Total Debt 13,411.00
Total Equity 93,586.92
Total Capital 106,997.92
Debt Weighting 12.53
Equity Weighting 87.47
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 30,871.0031,821.8330,275.2930,108.7731,656.3632,764.3433,177.1733,595.2034,018.5034,447.1334,881.16
EBITDA 8,017.208,534.618,250.028,517.779,082.218,472.869,007.609,121.109,236.029,352.409,470.24
EBIT 6,646.537,128.096,814.977,042.447,537.386,985.367,464.867,558.927,654.167,750.607,848.26
Tax Rate 28.32%29.04%29.08%28.32%35.54%23.43%28.96%28.96%28.96%28.96%28.96%
EBIAT 4,764.035,058.254,832.985,048.174,858.245,348.515,303.305,370.125,437.795,506.305,575.68
Depreciation 1,370.671,406.521,435.051,475.331,544.831,487.501,542.741,562.181,581.861,601.791,621.97
Accounts Receivable -15.3684.90-239.10-517.03-109.59251.94-60.07-60.83-61.59-62.37
Inventories -157.81189.25133.76-648.79-334.47326.51-50.92-51.56-52.21-52.87
Accounts Payable -7.70-112.06102.08146.21323.59-270.0325.1725.4825.8026.13
Capital Expenditure --178.5870.20-68.08-37.68-9.39162.5318.6018.8419.0719.31
UFCF 6,134.706,467.056,500.326,452.165,345.786,706.157,316.996,865.086,951.587,039.177,127.86
WACC
PV UFCF 6,653.025,675.685,225.674,811.354,429.87
SUM PV UFCF 42,475.02

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.98
Free cash flow (t + 1) 7,412.98
Terminal Value 123,962.82
Present Value of Terminal Value 77,041.17

Intrinsic Value

Enterprise Value 119,516.19
Net Debt 10,177.16
Equity Value 109,339.03
Shares Outstanding 602.00
Equity Value Per Share 181.63