Strategisk værdiansættelse af Flügger A/S: Hvad er et realistisk estimat for kursen på én Flügger-aktie pr. 1. maj 2010, under forudsætning af anvendelse af offentlig tilgængelig information?

Helle Pølkemann

Student thesis: Master thesis


The purpose of the thesis is to estimate the price of one Flügger share as of 1st of May 2010. The estimate must be provided by using publicly available information. The thesis contains both a strategic analysis and a financial analysis of Flügger. The analyses form the basis for preparation of budgets and the following estimation of the share price. The strategic analysis is based both on external and internal factors and the external factors cover society, the industry and the competitors. The financial analysis is an analysis of the financial performance during the period 2004/05 to 2009/10. The analyses show a positive development which ended suddenly in 2008/09 in connection with the global financial crisis. The analyses indicate a fast return to a positive development, however, in a somewhat steadier pace than during the period of 2004/05 to 2007/08. Also, the analyses show that the growth potential on the Scandinavian markets is limited to capturing market shares. However, on the new emerging markets in Eastern Europe and China there are great growth potential but realisation of this potential is expected to require large investments. The financial analysis shows a company with great financial freedom and with that the freedom to act independently. The main shareholder, Ulf Schnack, who also takes part in the daily running of the company, has the majority of votes, while banks and creditors have no more influence than other business partners. Based on the analyses above budgets have been prepared for the coming 5 years and for the terminal period, where the terminal period represents the remaining lifespan. The budgets show a positive development in the business but estimated more conservatively at a lower level than the historical. The level of investments is expected to continue at a high level in order to maintain a high level of growth. Also, the working capital is expected to continue on the current level, which is an improvement compared to previously, and a consequence of increased focus due to the financial crisis. Based on the prepared budgets, an estimated share price has been calculated using the DCF-model and multiples for revenue and EBITDA. The DCF-model is based on assumptions of owners and creditors expectations of return. The weighted average demand for return, WACC, is estimated at 9 %. Hence the share price is estimated at 360 using this model. Using multiples to indicate a share price build on the assumption that comparable companies quoted on the stock exchange are used as benchmark, which for Flügger does not constitute a realistic benchmark to its competitors. A calculation based on revenue multiples for 24 companies in the chemical and painting industry indicates a share price of 400 to 500, while the same calculation using EBITDA multiples indicates a share price of300 to 435. It is assessed that the DCF-model should be given greatest weight for which reason the multiple indications are not assessed to give rise to an adjustment of the estimated share price of 360. Compared with the official price of 475 as of 1st of May 2010 the advice today would be to sell.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2010
Number of pages113