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Discounted Cash Flow (DCF) Analysis Unlevered


Walgreens Boots Alliance Inc.

Walgreens Boots Alliance Inc. (WBA)

Healthcare

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 72,217.0076,391.14103,441.25117,343.75118,212.09131,534.60149,068.16168,938.94191,458.50216,979.92245,903.35
Revenue (%)
EBITDA 5,495.714,927.237,623.627,486.537,187.308,405.069,734.1511,031.7112,502.2414,168.7916,057.49
EBITDA (%)
EBIT 4,210.253,613.305,885.815,773.315,532.336,629.347,468.318,463.849,592.0710,870.6912,319.76
EBIT (%)
Depreciation 1,285.461,313.931,737.811,713.221,654.971,775.722,265.842,567.872,910.173,298.093,737.73
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 2,108.742,643.132,999.809,809.943,298.12789.215,396.276,115.596,930.807,854.678,901.70
Total Cash (%)
Account Receivables 2,628.703,216.076,847.816,254.426,525.316,576.737,960.249,021.3410,223.8811,586.7313,131.24
Account Receivables (%)
Inventories 6,853.396,073.108,678.728,953.338,901.379,562.5711,567.6913,109.6614,857.1816,837.6419,082.10
Inventories (%)
Accounts Payable 4,636.334,316.1010,085.5210,995.1112,495.0213,561.2213,609.9215,424.1317,480.1619,810.2722,450.98
Accounts Payable (%)
Capital Expenditure -1,213.25-1,107.67-1,251.64-1,325.98-1,347.62-1,367.96-1,773.91-2,010.37-2,278.36-2,582.06-2,926.25
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 49.86
Diluted Shares Outstanding 995.00
Cost of Debt
Tax Rate 16.57
After-tax Cost of Debt -0.78
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.89
Total Debt 12,431.00
Total Equity 49,610.70
Total Capital 62,041.70
Debt Weighting 20.04
Equity Weighting 79.96
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 72,217.0076,391.14103,441.25117,343.75118,212.09131,534.60149,068.16168,938.94191,458.50216,979.92245,903.35
EBITDA 5,495.714,927.237,623.627,486.537,187.308,405.069,734.1511,031.7112,502.2414,168.7916,057.49
EBIT 4,210.253,613.305,885.815,773.315,532.336,629.347,468.318,463.849,592.0710,870.6912,319.76
Tax Rate 37.04%44.13%20.02%19.28%15.71%16.57%25.46%25.46%25.46%25.46%25.46%
EBIAT 2,650.782,018.774,707.754,659.974,663.255,530.695,567.006,309.087,150.088,103.199,183.35
Depreciation 1,285.461,313.931,737.811,713.221,654.971,775.722,265.842,567.872,910.173,298.093,737.73
Accounts Receivable --587.37-3,631.74593.39-270.89-51.42-1,383.51-1,061.10-1,202.54-1,362.84-1,544.51
Inventories -780.30-2,605.62-274.6151.96-661.19-2,005.12-1,541.97-1,747.52-1,980.46-2,244.46
Accounts Payable --320.235,769.42909.591,499.911,066.2048.711,814.202,056.042,330.112,640.71
Capital Expenditure --105.57143.9774.3521.6320.34405.95236.46267.98303.70344.19
UFCF 3,936.253,099.826,121.597,675.907,620.847,680.334,898.868,324.559,434.2110,691.7912,117.00
WACC
PV UFCF 4,538.507,144.897,501.687,876.278,269.58
SUM PV UFCF 49,225.40

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.94
Free cash flow (t + 1) 12,601.68
Terminal Value 319,839.72
Present Value of Terminal Value 218,283.21

Intrinsic Value

Enterprise Value 267,508.60
Net Debt 11,641.79
Equity Value 255,866.81
Shares Outstanding 995.00
Equity Value Per Share 257.15

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
9.94 (%) 125.91 Buy 136.79 Buy 150.41 Buy 167.95 Buy 191.41 Buy 224.35 Buy 274.02 Buy 357.49 Buy 526.99 Buy
9.44 (%) 119.74 Buy 129.36 Buy 141.27 Buy 156.38 Buy 176.18 Buy 203.26 Buy 242.54 Buy 304.66 Buy 417.69 Buy
8.94 (%) 114.18 Buy 122.74 Buy 133.22 Buy 146.34 Buy 163.23 Buy 185.82 Buy 217.55 Buy 265.39 Buy 345.78 Buy
8.44 (%) 109.15 Buy 116.81 Buy 126.08 Buy 137.55 Buy 152.10 Buy 171.18 Buy 197.27 Buy 235.10 Buy 294.94 Buy
7.94 (%) 104.60 Buy 111.46 Buy 119.71 Buy 129.81 Buy 142.45 Buy 158.73 Buy 180.49 Buy 211.06 Buy 257.15 Buy
7.44 (%) 100.44 Buy 106.63 Buy 114.01 Buy 122.94 Buy 134.00 Buy 148.02 Buy 166.40 Buy 191.54 Buy 228.00 Buy
6.94 (%) 96.65 Buy 102.25 Buy 108.87 Buy 116.82 Buy 126.55 Buy 138.73 Buy 154.42 Buy 175.39 Buy 204.86 Buy
6.44 (%) 93.18 Buy 98.26 Buy 104.22 Buy 111.33 Buy 119.94 Buy 130.60 Buy 144.12 Buy 161.84 Buy 186.07 Buy
5.94 (%) 89.99 Buy 94.61 Buy 100.00 Buy 106.39 Buy 114.05 Buy 123.43 Buy 135.18 Buy 150.30 Buy 170.52 Buy