Strategisk værdiansættelse af NKT Holding A/S

Jakob Witold Korcyl & Thomas Fleron Hansen

Student thesis: Master thesis


The complex structure of a conglomerate like NKT Holding A/S means in the eyes of an investor that he/she seldom has a comprisable peer group for which the investor can assess the company’s fair value. This in our eyes brings in front the necessity of a valuation. The subject of this thesis has been to assess a fair value of a stock in NKT Holding A/S on May 5. 2008 based on a strategic valuation of the company and the four subsidiaries: NKT Cables, Nilfisk-Advance, NKT Photonics and the joint venture owned NKT Flexibles. By means of a strategic analysis of the current market positions, the growth prospects of each company were projected. On the basis of this analysis it was estimated that NKT Cables would have a moderate growth-rate, based on the large percentage of NKT Cables turnover in the low voltage segment and the link between the slowdown in the building and housing sector. It was estimated that Nilfisk-Advance would have a growth rate slightly below the general worldwide economics growth, based on the fear of companies cutting down on replacing industrial cleaning equipments in times of economic slowdown. NKT Flexibles was estimated to grow at a very high rate based on the unusually good structural conditions within the oildrilling segment. NKT Photonics was estimated to grow at a very high rate based on the company’s high R&D costs. The analysis of the companies’ accounting-policy showed that their account overall is of a very high standard and in accordance with the preferable practices for analytical purposes. Thus, only a few corrections in their accounts were necessary. The analysis of key accounting figures combined with the strategic analyze helped us to make a budget for each of the four company’s turnover, which we summarized to a growth factor for the holding company and used this as a discount factor. On the basis of the aforementioned analyses NKT Holding were valued by the Discounted Cash Flow & Economic Value Added Model that gave us a value of DKK 463,2 pr. share, compared with the stock price at DKK 422 may. 5. We tested the models strengths and sensitive against several factors her among changes in wacc, g and turnover. Consequently the conclusions of the thesis on the basis of the market conditions at the given time, and the modest upside from the traded price to the price we found were that we would recommend a Hold recommendation.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2008
Number of pages135