Falck A/S: Strategisk analyse, regnskabsanalyse og værdiansættelse

Rasmus Peder Due Larsen

Student thesis: Master thesis

Abstract

The main purpose of this master thesis is to determine the value of the Danish company Falck A/S. The value is determined at the 30 of June 2011. The company was founded in 1906 and started offering customers to save their personal belongings during a fire. Today the company operates in four different divisions, assistance, emergency, healthcare and training. Falck is one of the largest companies in the world on each of these four divisions. The framework for the strategic analysis consists of PEST-analysis, Porters five forces and to sum it all up, a SWOT-analysis. The strategic analysis showed the differences between the four divisions and the difficult strategic choices, this leaves for Falck. The thesis showed that Falck, in each division, is among the market leaders. The company is in a favorable position for development of new products and seizing opportunities for growth that arise suddenly. The financial analysis is based on historical financial reports from the last six years. The analysis showed that Falck has been growing at a high rate during this period both from organic growth but also from buying several companies. Falck has shown a decline in costs percentage and an incline in sales, which is positive. At the same time the invested capital has inclined remarkably. The future results are based on Falcks ability to integrate the new companies into the existing company structure. Based on the strategic analysis and analysis of the financial reports a budget has been made for Falck. The WACC is estimated at 5.9 %. Growth in the terminal period is estimated different for each division, but the level is between 2 and 4 percent. Based on the forecasted future the valuation is conducted using a discounted-cash-flow model. Falcks equity is estimated to 8,836 million DKK. This value gives a share price at 95.5 DKK. The estimated value has been subject to a stress test of the underlying value drivers, which showed, that the value is very sensitive to changes in WACC and stronger towards changes in the growth rate used in the terminal period.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages111