STRICTLY PRIVATE AND CONFIDENTIAL

Mar-20
Happy Hour Co — MODEL
Assumptions
Circular switch

On / off 1

Key assumptions

Last Historical FYE 30-Mar-19

Transaction date 31-Mar-20

Enterprise value calculation

Current share price (c) 165.0 p_price

NOSH (m) 199.0
Market cap ($m) 328.4
Net debt / (cash) ($m) 84.6
Minority interests ($m) 0.0
Pension liability ($m) 0.0
Investment in associates ($m) 0.0

EV ($m) 413.0
Happy Hour Co - 5 Year plan

5 Year Plan
FY20 FY21 FY22 FY23 FY24
Revenue 1,149 1,256 1,354 1,447 1,443
YoY growth % 9.3% 7.8% 6.9% -0.3%
GP $ 583 634 689 737 753
GM% 50.7% 50.5% 50.9% 50.9% 52.2%
Opex (523) (580) (622) (662) (678)
Operating profit 60 54 67 75 75
Operating margin % 5.2% 4.3% 4.9% 5.2% 5.2%
Interest and Amortisation (5) (6) (6) (6) (6)
Group PBT (Underlying) 55 48 61 68 69

Exceptionals (18) (7) 1 (5)

Group PBT post exceptionals 55 30 54 70 64
Add back: Interest 3 4 4 4 4
Add back: Amortisation 2 2 2 2 2
Add back: Depreciation 34 38 45 50 53
EBITDA post exceptionals 94 75 105 126 123

Adjust for non-cash exceptionals 0 0 0 24 0

Capex (36) (51) (50) (50) (50)
Acquisition (9) (9) 0 0 0
Tax (18) (9) (11) (12) (12)
Interest (3) (4) (4) (4) (4)
Working Capital 6 16 15 11 4
Dividend (37) (24) (24) (24) (24)
Other 0 (5) (5) (5)

Net Cash flow (3) (6) 26 65 31

Free Cash Flow 43 27 50 89 55

Opening Net Debt (82) (85) (91) (65) 0

Closing Net Debt (85) (91) (65) 0 32
Net debt : EBITDA 0.9x 1.0x 0.6x (0.0x) (0.2x)
 Income statement
Actuals CMD case Extrapolations

March YE ($mm) 2014A 2015A 2016A 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Total revenue 939.7 1,004.9 1,021.5 1,095.0 1,135.1 1,138.6 1,149.2 1,255.6 1,353.8 1,447.0 1,442.6 1,471.5 1,498.0 1,521.9 1,543.2 1,561.8 1,577.4
Management case 1,149.2 1,255.6 1,353.8 1,447.0 1,442.6
% forecast growth 0.9% 9.3% 7.8% 6.9% (0.3%) 2.0% 1.8% 1.6% 1.4% 1.2% 1.0%

EBITDA 101.1 109.9 114.6 108.7 109.5 98.2 94.1 92.6 111.8 124.4 127.6 130.5 133.2 135.8 138.1 140.1 142.0
Management case 94.1 92.6 111.8 124.4 127.6
% growth n.a. 8.7% 4.3% (5.1%) 0.7% (10.3%) (4.1%) (1.6%) 20.7% 11.3% 2.6% 2.3% 2.1% 1.9% 1.7% 1.5% 1.3%
% forecast margin 8.2% 7.4% 8.3% 8.6% 8.8% 8.9% 8.9% 8.9% 8.9% 9.0% 9.0%
94.1
Depreciation and amortisation (23.3) (25.3) (30.1) (31.6) (34.9) (36.0) (36.1) (40.5) (47.2) (51.8) (54.8) (53.6) (52.4) (51.1) (49.9) (48.7) (47.5)
% growth n.a. 8.6% 19.0% 5.0% 10.4% 3.2% 0.4% 12.0% 16.7% 9.8% 5.7% (2.2%) (2.3%) (2.3%) (2.4%) (2.4%) (2.5%)
% capex 76.6% 67.5% 74.7% 87.5% 93.6% 116.1% 100.4% 79.3% 94.4% 103.7% 109.6% 107.2% 104.7% 102.3% 99.9% 97.4% 95.0%
% margin 2.5% 2.5% 2.9% 2.9% 3.1% 3.2% 3.1% 3.2% 3.5% 3.6% 3.8% 3.6% 3.5% 3.4% 3.2% 3.1% 3.0%

EBIT 77.8 84.6 84.5 77.1 74.6 62.2 58.0 52.2 64.6 72.6 72.8 76.9 80.9 84.6 88.1 91.4 94.5
% growth n.a. 8.7% (0.1%) (8.8%) (3.2%) (16.6%) (6.7%) (10.1%) 23.8% 12.3% 0.3% 5.7% 5.1% 4.6% 4.2% 3.7% 3.3%
% margin 8.3% 8.4% 8.3% 7.0% 6.6% 5.5% 5.0% 4.2% 4.8% 5.0% 5.0% 5.2% 5.4% 5.6% 5.7% 5.9% 6.0%

% tax rate 19.0% 19.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0%

x Net income 55.5 65.8 64.9 59.5 58.4 48.3 44.5 39.9 50.2 56.8 57.0
% growth n.a. 18.6% (1.4%) (8.3%) (1.8%) (17.3%) (7.9%) (10.3%) 25.9% 13.2% 0.3%
% margin 5.9% 6.5% 6.4% 5.4% 5.1% 4.2% 3.9% 3.2% 3.7% 3.9% 4.0%

Cashflow statement

Capex (30.4) (37.5) (40.3) (36.1) (37.3) (31.0) (36.0) (51.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0)
% growth n.a. 23.4% 7.5% (10.4%) 3.3% (16.9%) 16.1% 41.7% (2.0%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
% sales 3.2% 3.7% 3.9% 3.3% 3.3% 2.7% 3.1% 4.1% 3.7% 3.5% 3.5% 3.4% 3.3% 3.3% 3.2% 3.2% 3.2%
% Cash conversion 69.9% 65.9% 64.8% 66.8% 65.9% 68.4% 61.8% 44.9% 55.3% 59.8% 60.8% 61.7% 62.5% 63.2% 63.8% 64.3% 64.8%

Change in Working Capital (5.3) 25.1 (11.2) (16.3) (12.6) (10.4) 6.0 16.1 15.2 11.1 4.0 0.0 0.0 0.0 0.0 0.0 0.0
% growth n.a. (573.6%) (144.6%) 45.5% (22.7%) (17.5%) (157.7%) 168.5% (5.9%) (26.8%) (64.4%) (100.0%) n.a. n.a. n.a. n.a. n.a.
% sales (0.6%) 2.5% (1.1%) (1.5%) (1.1%) (0.9%) 0.5% 1.3% 1.1% 0.8% 0.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Other Cashflows (1.5) 0.7 0.0 0.0 (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0)
% growth n.a. n.a. n.a. n.a. n.a. (149.3%) (100.0%) n.a. n.a. 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
% sales 0.0% 0.0% 0.0% 0.0% 0.1% (0.1%) 0.0% 0.0% 0.4% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%

Exceptional items 0.0 0.0 0.0 (18.0) (6.8) 25.1 (4.9) 0.0 0.0 0.0 0.0 0.0 0.0
% growth n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. (62.5%) (472.3%) (119.4%) (100.0%) n.a. n.a. n.a. n.a. n.a.
% sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.4% 0.5% (1.7%) 0.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Summary financials
March Y/E 2014A 2015A 2016A 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Revenue 940 1,005 1,022 1,095 1,135 1,139 1,149 1,256 1,354 1,447 1,443 1,471 1,498 1,522 1,543 1,562 1,577
% growth n.a. 6.9% 1.7% 7.2% 3.7% 0.3% 0.9% 9.3% 7.8% 6.9% (0.3%) 2.0% 1.8% 1.6% 1.4% 1.2% 1.0%
EBITDA 101 110 115 109 110 98 94 93 112 124 128 131 133 136 138 140 142
% growth n.a. 8.7% 4.3% (5.1%) 0.7% (10.3%) (4.1%) (1.6%) 20.7% 11.3% 2.6% 2.3% 2.1% 1.9% 1.7% 1.5% 1.3%
% margin 10.8% 10.9% 11.2% 9.9% 9.6% 8.6% 8.2% 7.4% 8.3% 8.6% 8.8% 8.9% 8.9% 8.9% 8.9% 9.0% 9.0%
D&A (23) (25) (30) (32) (35) (36) (36) (40) (47) (52) (55) (54) (52) (51) (50) (49) (48)
% of revenue (2.5%) (2.5%) (2.9%) (2.9%) (3.1%) (3.2%) (3.1%) (3.2%) (3.5%) (3.6%) (3.8%) (3.6%) (3.5%) (3.4%) (3.2%) (3.1%) (3.0%)
% of capex 76.6% 67.5% 74.7% 87.5% 93.6% 116.1% 100.4% 79.3% 94.4% 103.7% 109.6% 107.2% 104.7% 102.3% 99.9% 97.4% 95.0%
EBIT 78 85 85 77 75 62 58 52 65 73 73 77 81 85 88 91 94
% growth n.a. 8.7% (0.1%) (8.8%) (3.2%) (16.6%) (6.7%) (10.1%) 23.8% 12.3% 0.3% 5.7% 5.1% 4.6% 4.2% 3.7% 3.3%
% margin 8.3% 8.4% 8.3% 7.0% 6.6% 5.5% 5.0% 4.2% 4.8% 5.0% 5.0% 5.2% 5.4% 5.6% 5.7% 5.9% 6.0%
EBITDA 101 110 115 109 110 98 94 93 112 124 128 131 133 136 138 140 142
Capex (30) (38) (40) (36) (37) (31) (36) (51) (50) (50) (50) (50) (50) (50) (50) (50) (50)
% revenue 3.2% 3.7% 3.9% 3.3% 3.3% 2.7% 3.1% 4.1% 3.7% 3.5% 3.5% 3.4% 3.3% 3.3% 3.2% 3.2% 3.2%
Change in NWC (5) 25 (11) (16) (13) (10) 6 16 15 11 4 0 0 0 0 0 0
% revenue (0.6%) 2.5% (1.1%) (1.5%) (1.1%) (0.9%) 0.5% 1.3% 1.1% 0.8% 0.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Other Cashflows 0 0 0 0 (2) 1 0 0 (5) (5) (5) (5) (5) (5) (5) (5) (5)
% revenue 0.0% 0.0% 0.0% 0.0% 0.1% (0.1%) 0.0% 0.0% 0.4% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%
Exceptional items 0 0 0 0 0 0 0 (18) (7) 25 (5) 0 0 0 0 0 0
% revenue 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.4% 0.5% (1.7%) 0.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
DCF
Key assumptions
Transaction date 31-Mar-20
Next financial YE 31-Mar-21
Perpetuity growth rate 0.5% <<< Put down the assumptions after discussing with your senior
TV exit EBITDA multiple 8.5x
WACC used for sensitivity analy 8.5%

Below fill in the blanks by linking from the Financials tab update formula, growth is expressed vs previous year and margin is vs sales update as noted
DCF FCF Calculation

Stub period (731) (366) 0 365 730 1,095 1,461 1,826 2,191 2,556 2,922 3,287 3,652
Stub factor 1 1 1 0 0 0 0 0 0 0 0 0 0

Actuals Estimates
March YE ($mm) 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Revenue 1,095.0 1,135.1 1,138.6 1,149.2 1,255.6 1,353.8 1,447.0 1,442.6 1,471.5 1,498.0 1,521.9 1,543.2 1,561.8 1,577.4
% growth 0% 3.5% 0.3% 0.9% 8.5% 7.3% 6.4% (0.3%) 2.0% 1.8% 1.6% 1.4% 1.2% 1.0%

EBITDA 108.7 109.5 98.2 94.1 92.6 111.8 124.4 127.6 130.5 133.2 135.8 138.1 140.1 142.0
% margin 9.9% 9.6% 8.6% 8.2% 7.4% 8.3% 8.6% 8.8% 8.9% 8.9% 8.9% 8.9% 9.0% 9.0%
% growth 0.0% 0.7% -11.5% -4.3% -1.6% 17.1% 10.1% 2.5% 2.3% 2.1% 1.9% 1.7% 1.5% 1.3%

D&A (31.6) (34.9) (36.0) (36.1) (40.5) (47.2) (51.8) (54.8) (53.6) (52.4) (51.1) (49.9) (48.7) (47.5)
% sales -2.9% -3.1% -3.2% -3.1% -3.2% -3.5% -3.6% -3.8% -3.6% -3.5% -3.4% -3.2% -3.1% -3.0%
% of capex 87.5% 93.6% 116.1% 100.4% 79.3% 94.4% 103.7% 109.6% 107.2% 104.7% 102.3% 99.9% 97.4% 95.0%

EBIT 77.1 74.6 62.2 58.0 52.2 64.6 72.6 72.8 76.9 80.9 84.6 88.1 91.4 94.5
% margin 7.0% 6.6% 5.5% 5.0% 4.2% 4.8% 5.0% 5.0% 5.2% 5.4% 5.6% 5.7% 5.9% 6.0%
% growth 0.0% -3.4% -19.9% -7.2% -11.2% 19.2% 11.0% 0.3% 5.4% 4.9% 4.4% 4.0% 3.6% 3.2%

Tax 11.0 8.9 11.0 12.3 12.4 13.1 13.7 14.4 15.0 15.5 16.1 << EBIT*tax rate
% tax rate 19.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0%

EBIAT 47.0 43.3 53.6 60.2 60.4 63.8 67.1 70.2 73.2 75.9 78.4 << EBIT+ (-tax) or - (+tax)
% margin 4.1% 3.4% 4.0% 4.2% 4.2% 4.3% 4.5% 4.6% 4.7% 4.9% 5.0%
% growth 0.0% (8.5%) 19.2% 11.0% 0.3% 5.4% 4.9% 4.4% 4.0% 3.6% 3.2%

D&A 36.1 40.5 47.2 51.8 54.8 53.6 52.4 51.1 49.9 48.7 47.5

Capex (36.1) (37.3) (31.0) (36.0) (51.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0)
% sales (3.3%) (3.3%) (2.7%) (3.1%) (4.1%) (3.7%) (3.5%) (3.5%) (3.4%) (3.3%) (3.3%) (3.2%) (3.2%) (3.2%)
% D&A 114.2% 106.9% 86.1% 99.6% 126.1% 105.9% 96.5% 91.2% 93.3% 95.5% 97.8% 100.1% 102.6% 105.3%

Change in working capital (16.3) (12.6) (10.4) 6.0 16.1 15.2 11.1 4.0 0.0 0.0 0.0 0.0 0.0 0.0
% sales (1.5%) (1.1%) (0.9%) 0.5% 1.3% 1.1% 0.8% 0.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Other Cashflows 0.0 (1.5) 0.7 0.0 0.0 (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0)
% sales 0.0% (0.1%) 0.1% 0.0% 0.0% (0.4%) (0.3%) (0.3%) (0.3%) (0.3%) (0.3%) (0.3%) (0.3%) (0.3%)

Exceptional items 0.0 0.0 0.0 0.0 (18.0) (6.8) 25.1 (4.9) 0.0 0.0 0.0 0.0 0.0 0.0
% sales 0.0% 0.0% 0.0% 0.0% (1.4%) (0.5%) 1.7% (0.3%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FCF 53.1 30.9 54.2 93.3 59.3 62.4 64.5 66.4 68.1 69.6 70.9 <<add EBIAT+D&A+Capex(-ve)+Change in WC (-ve)+other cashflo

Stub period (53.1) (0.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
FCF for discounting 0.0 30.8 54.2 93.3 59.3 62.4 64.5 66.4 68.1 69.6 70.9

Days to cashflow 0 365 731 1,096 1,461 1,826 2,192 2,557 2,922 3,287 3,653
Discount factor 1.0 0.9 0.8 0.8 0.7 0.7 0.6 0.6 0.5 0.5 0.4

Terminal value Perpetuity growth portion 890.7

Exit EBITDA multiple 1,206.7

Perpetuity growth method Exit EBITDA multiple method

Present value ($m) (%) Present value ($m) (%)
PV of FCF 409 50.9% PV of FCF 409.1 41.4%
PV of Terminal Value 394 49.1% PV of Terminal Value 579.1 58.6%
Enterprise value 803 100.0% Enterprise value 988.2 100.0%
Net debt & adjustments (84.6) Net debt & adjustments (84.6)
Equity value 718 Equity value 903.5
Share price 361 Share price 454.0
% premium to current 118.8% % premium to current 175.2%

Sensitivity analysis
Spread rates and step-up

Perpetuity growth 0.5% Perptuity growth rate step-up 0.25% EBITDA multiple 8.5x EBITDA multiple step-up 0.5x
WACC 8.5% WACC step-up 0.50% WACC 8.5% WACC step-up 0.5%

Perpetuity growth rate analysis EBITDA multiple analysis

Enterprise value ($m) Enterprise value ($m)
WACC (%) Perpetuity growth rate (%) WACC (%)Exit EBITDA multiple (x)
803.059678884 0.00% 0.25% 0.50% 0.75% 1.00% 988.1642070082 7.5x 8.0x 8.5x 9.0x 9.5x
7.5% 7.5%
8.0% 8.0%
8.5% 8.5%
9.0% 9.0%
9.5% 9.5%

Offer price (p) Offer price (p)

WACC (%) Perpetuity growth rate (%) WACC (%)Exit EBITDA multiple (x)
361.0 0.00% 0.25% 0.50% 0.75% 1.00% 454.0 7.5x 8.0x 8.5x 9.0x 9.5x
7.5% 404 396 396 404 421 7.5% 452 434 434 452 489
8.0% 437 428 428 437 459 8.0% 470 450 450 470 508
8.5% 437 428 428 437 459 8.5% 470 450 450 470 508
9.0% 404 396 396 404 421 9.0% 452 434 434 452 489
9.5% 348 343 343 348 361 9.5% 420 403 403 420 454

Summary financials
March YE ($mm) 2017A 2018A 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
EBITDA 108.7 109.5 98.2 94.1 92.6 111.8 124.4 127.6 130.5 133.2 135.8 138.1 140.1 142.0
% margin 9.9% 9.6% 8.6% 8.2% 7.4% 8.3% 8.6% 8.8% 8.9% 8.9% 8.9% 8.9% 9.0% 9.0%
D&A 0.0 0.0 0.0 36.1 40.5 47.2 51.8 54.8 53.6 52.4 51.1 49.9 48.7 47.5
% of capex 0.0% 0.0% 0.0% 100.4% 79.3% 94.4% 103.7% 109.6% 107.2% 104.7% 102.3% 99.9% 97.4% 95.0%
EBIT 77.1 74.6 62.2 58.0 52.2 64.6 72.6 72.8 76.9 80.9 84.6 88.1 91.4 94.5
% margin 7.0% 6.6% 5.5% 5.0% 4.2% 4.8% 5.0% 5.0% 5.2% 5.4% 5.6% 5.7% 5.9% 6.0%
Tax 0.0 0.0 0.0 11.0 8.9 11.0 12.3 12.4 13.1 13.7 14.4 15.0 15.5 16.1
Tax rate 0.0% 0.0% 0.0% 19.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0%
EBIAT 0.0 0.0 0.0 47.0 43.3 53.6 60.2 60.4 63.8 67.1 70.2 73.2 75.9 78.4
+D&A 31.6 34.9 36.0 36.1 40.5 47.2 51.8 54.8 53.6 52.4 51.1 49.9 48.7 47.5
+ Maintenance capex (36.1) (37.3) (31.0) (36.0) (51.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0)
+Change in working capital (16.3) (12.6) (10.4) 6.0 16.1 15.2 11.1 4.0 0.0 0.0 0.0 0.0 0.0 0.0
+ Exceptional cash flows 0.0 0.0 0.0 0.0 (18.0) (6.8) 25.1 (4.9) 0.0 0.0 0.0 0.0 0.0 0.0
+ Other cash flows 0.0 (1.5) 0.7 0.0 0.0 (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0)

FCF (20.8) (16.5) (4.7) 53.1 30.9 54.2 93.3 59.3 62.4 64.5 66.4 68.1 69.6 70.9
DCF output

Summary financials and cashflow

DCF Forecast Year 0 1

Mar YE ($m) 2020E 2021E

Revenue 1,149 1,256

% growth 9.3%

EBITDA 94 93

% margin 8.2% 7.4%

% growth (1.6%)

D&A (36) (40)

% of revenue 3.1% 3.2%

% of capex 79.3%

EBIT 58 52

% margin 5.0% 4.2%

Tax on EBIT (9)

% tax rate 17.0%

Capex (51)

% of revenue 4.1%

Change in NWC 16

Other Cashflows 0

% of revenue 0.0%

Exceptional items (18)

% of revenue 1.4%

Unlevered free cash flow 31

1
Cashflow Timing (Years to Discount)
0.92
Discount Factor
Discounted DCF cashflows 28

Net Present Value based on Perpetuity Growth Method

Sensitising firm valu

Value Based on 8.5% WACC & 0.5% TGR Amount ($m) % of NPV
Present Value of Cashflows 409 50.9%

PV of Terminal Value 394 49.1%

WACC (%)
 WACC (%)
Implied Firm NPV 803 100.0%

Net debt & adjustments (85)

Implied equity value 718

Implied share price ($c) 361

% premium to current 118.8%

 2 3 4 5 6 7 8 9

2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E

1,354 1,447 1,443 1,471 1,498 1,522 1,543 1,562

7.8% 6.9% (0.3%) 2.0% 1.8% 1.6% 1.4% 1.2%

112 124 128 131 133 136 138 140

8.3% 8.6% 8.8% 8.9% 8.9% 8.9% 8.9% 9.0%

20.7% 11.3% 2.6% 2.3% 2.1% 1.9% 1.7% 1.5%

(47) (52) (55) (54) (52) (51) (50) (49)

3.5% 3.6% 3.8% 3.6% 3.5% 3.4% 3.2% 3.1%

94.4% 103.7% 109.6% 107.2% 104.7% 102.3% 99.9% 97.4%

65 73 73 77 81 85 88 91

4.8% 5.0% 5.0% 5.2% 5.4% 5.6% 5.7% 5.9%

(11) (12) (12) (13) (14) (14) (15) (16)

17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0%

(50) (50) (50) (50) (50) (50) (50) (50)

3.7% 3.5% 3.5% 3.4% 3.3% 3.3% 3.2% 3.2%

15 11 4 0 0 0 0 0

(5) (5) (5) (5) (5) (5) (5) (5)

0.4% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%

(7) 25 (5) 0 0 0 0 0

0.5% (1.7%) 0.3% 0.0% 0.0% 0.0% 0.0% 0.0%

54 93 59 62 64 66 68 70

2 3 4 5 6 7 8 9

0.85 0.78 0.72 0.67 0.61 0.56 0.52 0.48

46 73 43 42 40 38 35 33

Sensitising firm value ($m) and implied offer price to WACC and TGR

Perpetuity Growth Rate (%)

0.00% 0.25% 0.50% 0.75% 1.00%

7.5% 888 / 404c 872 / 396c 872 / 396c 888 / 404c 923 / 421c
8.0% 955 / 437c 936 / 428c 936 / 428c 955 / 437c 997 / 459c

8.5% 955 / 437c 936 / 428c 936 / 428c 955 / 437c 997 / 459c

9.0% 888 / 404c 872 / 396c 872 / 396c 888 / 404c 923 / 421c

9.5% 778 / 348c 767 / 343c 767 / 343c 778 / 348c 803 / 361c
 10 TV

2030E
1,577

1.0%

142

9.0%

1.3%

(48)

3.0%

95.0%

94

6.0%

(16)

17.0%

(50)

3.2%

(5)

0.3%

0.0%

71 891

10

0.44

31 394
Actual: Historical financial performance of the target company.
CMD Case: ("Company Management's Case" or "Company's Management's View.") The target company's internal projectio
Extrapolations: Your own projections beyond the 5-year CMD Case period, based on industry trends, competitive analysis
EBITDA = Earings + Interest of Debt + Tax + Depreciation + Amortisation
EBIT (Operating Income) = Earnings + Interest of Debt + Tax - Depre - Amor
EBIAT = Earnings + Interest of Debt - Tax
DCF FCF Calculation
Stub Period: The period between the acquisition date and the end of the next fiscal year.
Stub Factor: The portion of the next fiscal year included in the stub period. Calculated as (Days in stub period) / (Days in
FCF (Free Cash Flow): Net Income + Depreciation & Amortization - Capital Expenditures - Change in Net Working Capit
FCF for Discounting: FCF adjusted for the stub factor. For the stub period, FCF is multiplied by the stub factor. For subs
Days to Cashflow: Assumed number of days between the end of each period and when the cash flow is received.
Discount Rate: Expected return on an Investment
Discount Factor: 1 / (1 + Discount Rate) ^ Number of Periods. Used to derive present value of future cashflow, investme
Terminal Value: The estimated value of the company beyond the explicit forecast period.

Perpetuity Growth Method

Perpetuity Growth Rate (TGR): The assumed constant growth rate of FCF in perpetuity.
WACC (Weighted Average Cost of Capital): The average cost of a company's capital, including both debt and equity.
Perpetuity Growth Rate Step-up: An increase in the TGR after a certain number of years.
WACC Step-up: An increase in the WACC after a certain number of years.

Present Value
Present Value (PV): The current value of a future sum of money, given a specified rate of return.
PV of FCF: The sum of the present values of all future FCFs.
PV of Terminal Value: The present value of the terminal value, calculated using the perpetuity growth method.
Enterprise Value: The total value of a company, including both equity and debt. PV of FCF + PV of TV
Net Debt & Adjustments: Total debt minus cash and other non-operating assets.
Equity Value: Enterprise Value minus Net Debt & Adjustments.
Share Price: Equity Value divided by the number of shares outstanding.
% Premium to Current: The percentage difference between the implied share price and the current market price.

Net Present Value based on Perpetuity Growth Method

Present Value: Present value (PV) is the current value of a future sum of money that's discounted by a rate of return. PV
Net Present Value: Net present value (NPV) is the difference between the PV of cash inflows and outflows over a period
TVR: terminal growth rate is the rate at which a company's cash flows are expected to grow indefinitely
Value Based on 0.0% WACC & 0.0% TGR: The value of the company assuming no discount rate and no growth in perpe
Present Value of Cashflows: The sum of the present values of all future FCFs.
PV of Terminal Value: The present value of the terminal value, calculated using the perpetuity growth method.
Implied Firm NPV: The difference between the present value of cash flows and the value based on 0.0% WACC & 0.0%
Net Debt & Adjustments: Total debt minus cash and other non-operating assets.
Implied Equity Value: Implied Firm NPV minus Net Debt & Adjustments.
Implied Share Price ($c): Implied Equity Value divided by the number of shares outstanding.
% Premium to Current: The percentage difference between the implied share price and the current market price.

EBITDA Multiple

EBITDA Multiple: Enterprise Value divided by EBITDA.

WACC: Weighted Average Cost of Capital.
EBITDA Multiple Step-up: An increase in the EBITDA multiple after a certain number of years.
WACC Step-up: An increase in the WACC after a certain number of years.
 get company's internal projections for the next 5 years, reflecting their strategic plans and market expectations.
stry trends, competitive analysis, and potential synergies from the acquisition.

(Days in stub period) / (Days in fiscal year).

- Change in Net Working Capital. FCF = Net Income - Opex - Capex
ied by the stub factor. For subsequent years, FCF is used as is.
he cash flow is received.

ue of future cashflow, investments, or goods and services.

cluding both debt and equity. WACC - (Debt/Debt + equity raised) * (Debt interest * (1 - 30% tax benefit)) - (equity/debt + equity) * (

etuity growth method.

F + PV of TV

he current market price.

counted by a rate of return. PV tells you the amount you'd need to invest today in order to earn a specific amount in the future.
ows and outflows over a period of time.
w indefinitely
ount rate and no growth in perpetuity.

etuity growth method.

based on 0.0% WACC & 0.0% TGR.

he current market price.

- (equity/debt + equity) * (14 calc using CAPM/DDM))

ount in the future.