Værdiansættelse af Hennes & Mauritz AB: Ved anvendelse af DCF-model og multipler, inkl. de regnskabs- og værdiansættelsesmæssige konsekvenser af kapitalisering af leasing

Louise Hillebrandt Jensen

Studenteropgave: Kandidatafhandlinger


The purpose of this Master Thesis is to determine the fair value of a share in the Swedish fast fashion company Hennes & Mauritz AB and compare the fair value with the current market price of the share as of 1st May 2015. The fair value is estimated through a Discounted Cash Flow model (DCF) supplemented by relative valuation. The DCF-model is based on a fundamental analysis of the company’s strategic and financial side. The analysis shows that H&M faces some changes both in the external environment and within the fast fashion industry that covers the lowest price segment in the clothing business. Low global GDP growth, especially on the European markets, increasing input costs, more focus on sustainability, a number of new competitors, and a high degree of rivalry in the market are factors seen as having a negative influence on H&M going forward. H&M is a significant global player that is well positioned in the market and can benefit from the economies of scale. The company has a strong growth history with a new-store growth above 10% annually since 1995. From 1995-2014 H&M delivered an unadjusted ROIC between 126.7% and 47.0% but with a decreasing trend since 2007. A stabilized turnover rate on the invested capital and improved like-for-like sales in 2014 and in the beginning of 2015 is seen as an indication of stabilization in ROIC. The company is investing in keeping the market position for example through an online platform. H&M also has further growth opportunities in new geographical markets. This is why I still see H&M as a solid company going forward. The analysis also shows the accounting effect of adjusting from operating to financial leasing as proposed in new accounting regulation. Adjusted for leasing H&M’s ROIC decreases to a historical level between 11.4% and 8.3%. The adjustment has no influence on the equity value as the increase in net interest bearing debt is balanced out by an increase in enterprise value that is affected by a lower WACC. Based on the strategic and financial analysis the free cash flows in the 10-year forecast period, the 15-year fade period and terminal period were determined. WACC was estimated to 7.6%. The base-case scenario gives a fair value of SEK 325.6 per share. Compared with the market price on 1st May 2015 of SEK 338.8 it implies a downside of 3.9%. The worst and best-case scenario tests the influence of the underlying assumptions and inputs in the DCF-model. The scenario analysis shows a price interval of SEK 251,1-450,9 per share. The relative valuation method supports the finding that H&M is slightly overvalued in the market. I conclude that the market may not have taken the full effects from increasing competition and earnings pressure into consideration.

UddannelserCand.merc.fir Finansiering og Regnskab, (Kandidatuddannelse) Afsluttende afhandling
Antal sider135