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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 22,597.8115,850.574,786.7512,927.6913,984.2712,384.5714,111.9513,843.8213,580.7913,322.7513,069.62
EBITDA (%)
EBIT 18,449.5811,980.121,068.669,439.4410,275.069,034.2310,010.769,820.569,633.979,450.929,271.35
EBIT (%)
Depreciation 4,148.233,870.453,718.093,488.253,709.213,350.344,101.184,023.263,946.823,871.833,798.26
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 5,322.084,123.323,809.294,554.796,348.466,217.895,482.605,378.435,276.245,175.995,077.65
Total Cash (%)
Account Receivables 6,196.633,888.011,475.553,664.172,598.492,648.093,519.913,453.043,387.433,323.073,259.93
Account Receivables (%)
Inventories 4,124.854,502.643,528.683,348.063,926.604,443.964,341.594,259.104,178.174,098.794,020.91
Inventories (%)
Accounts Payable 3,979.874,769.573,364.993,631.194,042.093,511.284,255.474,174.624,095.304,017.493,941.16
Accounts Payable (%)
Capital Expenditure -13,104.11-11,776.41-8,114.33-4,950.62-3,831.49-3,785.60-8,127.02-7,972.60-7,821.12-7,672.52-7,526.75
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 12.92
Diluted Shares Outstanding 5,197.43
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 67,150.82
Total Capital 84,324.82
Debt Weighting 20.37
Equity Weighting 79.63
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 22,597.8115,850.574,786.7512,927.6913,984.2712,384.5714,111.9513,843.8213,580.7913,322.7513,069.62
EBIT 18,449.5811,980.121,068.669,439.4410,275.069,034.2310,010.769,820.569,633.979,450.929,271.35
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 1,452.683,482.72745.875,557.878,081.239,266.565,786.885,676.935,569.075,463.265,359.46
Depreciation 4,148.233,870.453,718.093,488.253,709.213,350.344,101.184,023.263,946.823,871.833,798.26
Accounts Receivable -2,308.622,412.46-2,188.631,065.69-49.60-871.8266.8865.6164.3663.14
Inventories --377.79973.96180.62-578.54-517.36102.3882.4980.9279.3977.88
Accounts Payable -789.70-1,404.58266.20410.90-530.81744.19-80.85-79.32-77.81-76.33
Capital Expenditure --1,327.70-3,662.08-3,163.71-1,119.13-45.904,341.42-154.41-151.48-148.60-145.78
UFCF 5,600.928,745.992,783.734,140.5911,569.3611,473.2414,204.239,614.299,431.629,252.429,076.63
WACC
PV UFCF 12,891.847,919.767,051.446,278.335,589.98
SUM PV UFCF 52,925.46

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 10.18
Free cash flow (t + 1) 9,439.69
Terminal Value 152,745.81
Present Value of Terminal Value 94,070.93

Intrinsic Value

Enterprise Value 146,996.39
Net Debt 10,956.11
Equity Value 136,040.28
Shares Outstanding 5,197.43
Equity Value Per Share 26.17