Værdiansættelse af Fitness World: og en diskussion af børsnoteringsbeslutningen

Martin Skovly

Student thesis: Master thesis


The main purpose of this thesis was to estimate the market value of equity for the Danish unlisted fitness company Fitness World A/S as of 31/12/2013. The secondary purpose was to discuss the advantages and disadvantages of an IPO and recommend whether the company should be listed on the Danish stock exchange or remain privately owned. A strategic analysis was conducted to evaluate Fitness Worlds current and future non-financial value drivers. The conclusion of the analysis was that the company, as of today, is the market leader in the fitness industry in Denmark. Fitness World has centers in all regions of Denmark and has around half of all active fitness members. The company is the best when it comes to providing a convenient fitness experience to an affordable price. The strategic analysis also indicated that Fitness Worlds market position might be threatened in the future. The intensity of rivalry in the industry is high and the threat of new entrants and substitutes are similarly high. A financial analysis was also conducted to assess Fitness Worlds historic performance. The conclusion of this analysis was that the company was improving performance in the first half of the analysis period. In the second half of the period, the performance of the company was in a downward trend, only managing to improve the turnover rate of the invested capital. Compared to comparable competitors, Fitness World was performing well. The company outperformed the competitors in regard to NOPAT-margin, CAPEX and ROIC. The second biggest fitness chain in Denmark, fitness dk, performed better than Fitness World in relation to turnover rate of the invested capital. Based on the non-financial value drivers and the financial analysis, two budget scenarios were established. Both scenarios were of a period of 10 years. Pro forma income statements, balances and cash flow statements were prepared to enable valuation of the company. It was forecasted that the performance of Fitness World would continue the downward trend that was identified in the financial analysis due to the high competition in the industry. The valuation was primarily based on the present-value models, DCF and EVA. Trading multiples was used to evaluate the realism in the estimate. The market value of equity for Fitness World as of 31/12/2013 was estimated to 2,14 billion DKK, calculated under the assumption that either budget scenario was equally likely. The multiple analyses indicated that the estimate was realistic. It was recommended that Fitness World should not become listed as of this moment. Even though Fitness World could use this new source of financing, the disadvantages and the uncertainty regarding the future of the market and the company are too great.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2015
Number of pages119