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Discounted Cash Flow (DCF) Analysis Unlevered


VALE S.A. American Depositary Shares Each Representing one

VALE S.A. American Depositary Shares Each Representing one (VALE)

Basic Materials

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 46,767.0035,122.0223,384.2427,488.1733,967.1436,575.8135,880.8735,199.1334,530.3533,874.2733,230.66
Revenue (%)
EBITDA 22,597.8115,850.574,786.7512,927.6913,984.2712,384.5713,466.0913,210.2412,959.2412,713.0212,471.47
EBITDA (%)
EBIT 18,449.5811,980.121,068.669,439.4410,275.069,034.239,181.919,007.468,836.328,668.438,503.73
EBIT (%)
Depreciation 4,148.233,870.453,718.093,488.253,709.213,350.344,284.184,202.784,122.924,044.593,967.74
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 5,322.084,123.323,809.294,554.796,348.466,217.895,762.475,652.985,545.575,440.215,336.84
Total Cash (%)
Account Receivables 6,196.633,888.011,475.553,664.172,598.492,648.093,272.343,210.163,149.173,089.333,030.64
Account Receivables (%)
Inventories 4,124.854,502.643,528.683,348.063,926.604,443.964,578.404,491.414,406.074,322.364,240.23
Inventories (%)
Accounts Payable 3,979.874,769.573,364.993,631.194,042.093,511.284,495.874,410.454,326.654,244.454,163.80
Accounts Payable (%)
Capital Expenditure -13,104.11-11,776.41-8,114.33-4,950.62-3,831.49-3,785.60-7,739.50-7,592.45-7,448.20-7,306.68-7,167.85
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 10.92
Diluted Shares Outstanding -
Cost of Debt
Tax Rate -2.57
After-tax Cost of Debt 0.18
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.47
Total Debt 17,174.00
Total Equity -
Total Capital 17,174.00
Debt Weighting 100.00
Equity Weighting 0.00
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 46,767.0035,122.0223,384.2427,488.1733,967.1436,575.8135,880.8735,199.1334,530.3533,874.2733,230.66
EBITDA 22,597.8115,850.574,786.7512,927.6913,984.2712,384.5713,466.0913,210.2412,959.2412,713.0212,471.47
EBIT 18,449.5811,980.121,068.669,439.4410,275.069,034.239,181.919,007.468,836.328,668.438,503.73
Tax Rate 92.13%70.93%30.20%41.12%21.35%-2.57%42.19%42.19%42.19%42.19%42.19%
EBIAT 1,452.683,482.72745.875,557.878,081.239,266.565,307.755,206.915,107.985,010.924,915.72
Depreciation 4,148.233,870.453,718.093,488.253,709.213,350.344,284.184,202.784,122.924,044.593,967.74
Accounts Receivable -2,308.622,412.46-2,188.631,065.69-49.60-624.2562.1760.9959.8358.70
Inventories --377.79973.96180.62-578.54-517.36-134.4486.9985.3483.7282.12
Accounts Payable -789.70-1,404.58266.20410.90-530.81984.60-85.42-83.80-82.21-80.64
Capital Expenditure --1,327.70-3,662.08-3,163.71-1,119.13-45.903,953.91-147.05-144.26-141.52-138.83
UFCF 5,600.928,745.992,783.734,140.5911,569.3611,473.2413,771.759,326.379,149.178,975.348,804.81
WACC
PV UFCF 13,099.738,438.397,874.127,347.586,856.25
SUM PV UFCF 68,839.73

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.13
Free cash flow (t + 1) 9,157.00
Terminal Value 810,354.01
Present Value of Terminal Value 631,017.59

Intrinsic Value

Enterprise Value 699,857.31
Net Debt 10,956.11
Equity Value 688,901.20
Shares Outstanding -
Equity Value Per Share Infinity

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
7.13 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy -Infinity Sell
6.63 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy -Infinity Sell
6.13 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy
5.63 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy
5.13 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy
4.63 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy
4.13 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy
3.63 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy
3.13 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy