Discounted Cash Flow (DCF) Analysis Unlevered

Domtar Corp (UFS)

$ 54.75
7.37 (+15.56%)

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
Revenue 5,3915,5635,2645,0985,1575,4555,2203,6523,481.153,318.293,163.053,015.072,874.02
Revenue (%)
EBITDA 621768715638571705561272407.35388.30370.13352.81336.31
EBITDA (%)
EBIT 245384356290250397268-11177.79169.47161.54153.98146.78
EBIT (%)
Depreciation 376384359348321308293283229.57218.83208.59198.83189.53
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
Total Cash 65517412612513911161309150.05143.03136.34129.96123.88
Total Cash (%)
Account Receivables 662682641644728692638434436.26415.85396.40377.85360.18
Account Receivables (%)
Inventories 685714766759757762786630504.49480.89458.39436.95416.51
Inventories (%)
Accounts Payable 370374350332382404406260245.67234.18223.23212.78202.83
Accounts Payable (%)
Capital Expenditure -242-236-289-347-182-195-255-175-164.52-156.83-149.49-142.50-135.83
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 54.75
Beta 1.916
Diluted Shares Outstanding 55
Cost of Debt
Tax Rate 41.74
After-tax Cost of Debt 2.91%
Risk-Free Rate
Market Risk Premium
Cost of Equity 17.712
Total Debt 1,087
Total Equity 3,011.25
Total Capital 4,098.25
Debt Weighting 26.52
Equity Weighting 73.48
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
Revenue 5,3915,5635,2645,0985,1575,4555,2203,6523,481.153,318.293,163.053,015.072,874.02
EBITDA 621768715638571705561272407.35388.30370.13352.81336.31
EBIT 245384356290250397268-11177.79169.47161.54153.98146.78
Tax Rate -26.39%-65.13%8.97%18.47%32.64%17.25%4.55%41.74%4.01%4.01%4.01%4.01%4.01%
EBIAT 309.65634.12324.05236.43168.41328.51255.82-6.41170.65162.67155.06147.81140.89
Depreciation 376384359348321308293283229.57218.83208.59198.83189.53
Accounts Receivable --2041-3-843654204-2.2620.4119.4518.5417.68
Inventories --29-5272-5-24156125.5123.6022.5021.4520.44
Accounts Payable -4-24-1850222-146-14.33-11.49-10.96-10.44-9.95
Capital Expenditure -242-236-289-347-182-195-255-175-164.52-156.83-149.49-142.50-135.83
UFCF 443.65737.11359.05223.43275.41494.51325.82315.59344.62257.19245.16233.69222.75
WACC
PV UFCF 266.15174.56146.23122.49102.61
SUM PV UFCF 924.02

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 13.79
Free cash flow (t + 1) 231.66
Terminal Value 2,366.34
Present Value of Terminal Value 1,240.39

Intrinsic Value

Enterprise Value 2,164.41
Net Debt 778
Equity Value 1,386.41
Shares Outstanding 55
Equity Value Per Share 25.21