Strategisk analyse og værdiansættelse Fitness World A/S

Allan Høegsberg

Student thesis: Diploma thesis

Abstract

This Thesis aims to value Fitness World A/S in order to find the Enterprise Value of the company. The valuation is based on an analysis and description of the external, internal and economical factors affecting Fitness World A/S. Fitness World A/S is the market leader in the Fitness Branch in Denmark and is placed all over the country. The strategic analysis comes to the conclusion that the biggest external threats are the risks of renting all the properties and negotiate renewing and prices. Despite the risks, the cyclicality of the number of members (the turnover) is very low otherwise lot of other branches. That factor makes the branch very attractive, but there are also a lot of competitors, mainly Fitness DK and Fresh Fitness, which both are companies with growth expectations. Fitness World A/S has the advantage of being market leader with there big selection of centres which make them a naturally choice when customers need to choose fitness company. At the same time Fitness World has a financial advantage and the ability to buy out competitors with less financial strength. A weakness worth to mention is the service reputation, which is known as a weakness compared to the competitors. At the same time Fitness World has significantly more customers measured pr. centre than the competitors, and the crowded centres have a negative effect to the image. The accounting analysis shows that Fitness World has a very attractive ROE measured by the last 4 annual reports, which highly is the impact of a strong ROIC. The attractive ROE is descending because of a falling OG because of higher costs. The strategic analysis and the accounting analysis together leads to an initial estimate of 5 years forecast, which leads to the actual valuation, which is made by the The Free Cashflow discounted by Fitness Worlds weighted cost of capital (WACC). The analysis shows an Enterprise Value of mio. DKK 2.327 as a final conclusion. This is twice the value compared to other listed comparable companies abroad measured by the price-earning ratio, which can be explained by different markets and Fitness Worlds very attractive ROIC.

EducationsGraduate Diploma in Financial and Management Accounting, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2014
Number of pages89