Værdiansættelse af Posten Norden AB

Søren Wieck Mellemgaard

Student thesis: Master thesis

Abstract

The purpose of this master thesis is to create a strategic financial analysis and valuation of Posten Norden AB. Posten Norden has arisen as part of the merger between the Danish Post Danmark A/S and the Swedish Posten AB the 24 June 2009. The management has stated that the Initial Public Offering can be expected in the term, and it is found to be relevant to estimate a fair value for the Posten Norden share, based on the following problem statement: What is a fair value for the Posten Norden share? In order to answer the question, a strategic financial analysis was performed. The analysis has led to the following conclusions. Strategic financial analysis The PEST analysis showed that the most important threats are the liberalization and the technological substitution, and that the most important opportunities are an expected improvement of the economy, growing e-commerce and low interest rate level. Finally, the PEST-analysis showed that the EU Commission's transport policy is both a threat and an opportunity. The Porters'5 forces analysis showed that the the earning potential in the business unit letters is expected to be high, while the earning potential in the business unit logistics is expected to be limited. The value chain analysis showed that Posten Norden's strength are economies of scale in purchasing and it field and advanced technology in production as well as significant operational expertise and know-how. Furthermore, the value chain analysis showed that Posten Norden’s weaknesses are innovation and customer satisfaction. The financial analysis showed that Post Denmark’s return on equity (ROE) during the analysis period has been improved, since return on equity (ROE) has increased from 30,57 % in 2006 to 42,28 % in 2009, which is primarily due to profit share and the sale of its ownership in the Belgian postal service bpost in 2009. Post Denmark’s liquidity and solvency has during the analysis period improved significantly, since the degree of liquidity has risen from 76,8 % in 2006 to 158,0 % in 2009, and the equity ratio has increased from 35,5 % in 2006 to 53,0 % in 2009. Posten AB's returns on equity (ROE) has during the analysis period been unfavourable since returns on equity (ROE) has decreased from 17,18% in 2006 to estimated 2,83% in 2009, which is primarily due to restructuring costs incurred in 2009. Posten AB's liquidity has deteriorated during the analysis period, since the degree of liquidity has declined from 130,0 % in 2006 to 85,9 % in 2009, while Posten AB's solvency has been slightly improved during the analysis period, since the equity ratio has increased from 33,1 % in 2006 to 39,5 % in 2009. As a part of the merger, 2009 was affected by the dividend of 1,106 million DKK (SEK 1,400 million) paid to the Swedish state. Finally, the analysis showed that Post Denmark’s and Posten AB's operational risk is neutral-high, while the financial risk is low. Budgeting and valuation The proforma budget was estimated on the basis of the strategic financial analysis and includes a budget period of 7 years and a terminal period. While the budget period is characterized by variation in the financial value drivers, the terminal period is characterized by constancy in the financial value drivers. The valuation of the merged company Posten Norden was based on the Sum-Of-The-Parts method, and the value of Posten Norden was estimated on the basis of a valuation of Post Denmark and Posten AB plus an estimated value of expected synergies. The valuation of Posten Norden, based on the discounted cash flow model, was estimated to 34,379 million DKK - equivalent to a value of 17,2 DKK per share. The valuation was supplemented with sensitivity analysis, which showed that a fair estimated market value should be between 26,008 million DKK – 45,950 million DKK and illustrates that the valuation is associated with significant estimates and hence uncertainty. Furthermore, the valuation was supplemented with Multiple analysis, which showed that the estimated value of Posten Norden in all material is fair.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages162