Compact Valuation Model Strictly Confidential

Table of Contents Model Check

Outputs Balance Sheet Balanced? Yes

Inputs
Model

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Sensitivity Analysis

All figures in USD thousands unless stated

Terminal Growth Rate 2.0% Shares Outstanding (FD 000) 34,200

WACC 1 13.5% Current Price ($/sh) 2.71
Enterprise Value 284,580
Net Debt 21,000

ENTERPRISE VALUE 2 EQUITY VALUE PER SHARE

Terminal Growth Rate Terminal Growth Rate

1.0% 1.5% 2.0% 2.5% 3.0% 1.0% 1.5% 2.0% 2.5% 3.0%
12.5% 12.5% 7.68 #VALUE! #VALUE! #VALUE! #VALUE!
13.0% 13.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
WACC

WACC
13.5% 13.5% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
14.0% 14.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
14.5% 14.5% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!

EQUITY VALUE PREMIUM (DISCOUNT) TO CURRENT PRICE

Terminal Growth Rate Terminal Growth Rate

1.0% 1.5% 2.0% 2.5% 3.0% 1.0% 1.5% 2.0% 2.5% 3.0%
12.5% 262,711 #VALUE! #VALUE! #VALUE! #VALUE! 12.5% 183.5% #VALUE! #VALUE! #VALUE! #VALUE!
13.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! 13.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
WACC

13.5% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! 13.5% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
14.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! 14.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
14.5% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! 14.5% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!

WACC = Weighted Average Cost of Capital. ⁽¹ ⁾

This table requires the workbook calculation to be set to automatic to update. ⁽² ⁾
Model Assumptions

All figures in USD thousands unless stated 2020A 2021A 2022A 2023F 2024F 2025F 2026F 2027F

INCOME STATEMENT

Revenue 45,201 50,164 54,261 58,000 61,500 64,500 68,000 71,500

COGS 24,518 26,589 28,541 30,000 31,000 32,000 34,000 36,000
SG&A 4,800 5,100 5,500 6,000 6,600 7,300 7,700 8,100
Other Expenses 1,987 2,016 2,045 2,000 2,000 2,000 2,000 (2,000)
Depreciation 3,985 4,005 4,058 4,000 4,000 4,000 4,000 4,000
Interest Expense 1,845 1,652 1,398 1,200 1,000 800 600 400
Current Tax (Levered) 1 987 992 1,000 1,000 1,000 1,000 1,000 1,000
Deferred Tax (Levered) 1 1,957 2,001 2,006 2,000 2,000 2,000 20,000 2,000

CASH FLOW STATEMENT

Cash From Operations

Cash from Accounts Receivable 27 35 31 30 30 30 30 30
Cash from Inventory (185) (203) (220) (200) (200) (200) (200) (200)
Cash from Accounts Payable 168 182 174 175 175 175 175 175

Cash From Investing

Capital Expenditure (3,997) (4,016) (4,002) (4,000) (4,000) (4,000) (4,000) (4,000)

Cash From Financing

Line of Credit Issue / (Repay) (587) (875) (994) (7,000) – – – –
Term Loan Issue / (Repay) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000)
Equity Issue / (Buyback) – – – (500) (500) (500) (500) (500)
Payment of Dividends (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) 1,000

UNLEVERED FREE CASH FLOW

Current Tax (Unlevered) 2 1,086 1,091 1,104 1,100 1,100 1,100 1,100 1,100

These are levered taxes calculated after the impact of interest expense. ⁽¹ ⁾
These are unlevered taxes calculated before the impact of interest expense. ⁽² ⁾
Income Statement

All figures in USD thousands unless stated 2023F 2024F 2025F 2026F 2027F

Revenue 58,000 61,500 64,500 68,000 71,500

COGS (30,000) (31,000) (32,000) (34,000) (36,000)
Gross Profit 28,000 30,500 32,500 34,000 35,500

SG&A (5,500) (6,000) (6,600) (7,300) (7,700)

Other (2,000) (2,200) (2,000) (2,000) 2,000
EBITDA 20,500 22,300 23,900 24,700 29,800

Depreciation (4,000) (4,000) (4,000) (4,000) (4,000)

EBIT 16,500 18,300 19,900 20,700 25,800

Interest Expense (1,200) (1,000) (800) (600) (400)

EBT 15,300 17,300 19,100 20,100 25,400

Current Tax (1,000) (1,000) (1,000) (1,000) (1,000)

Deferred Tax (2,000) (2,000) (2,000) (20,000) (2,000)
Total Tax 1 (3,000) (3,000) (3,000) (21,000) (3,000)

Net Income 18,300 20,300 22,100 41,100 28,400

These are levered taxes calculated after the impact of interest expense. ⁽¹ ⁾
Cash Flow Statement

All figures in USD thousands unless stated 2023F 2024F 2025F 2026F 2027F

CASH FROM OPERATIONS

Net Income 18,300 20,300 22,100 41,100 28,400
Depreciation 4,000 4,000 4,000 4,000 4,000
Deferred Tax 2,000 2,000 20,000 2,000 –
Cash from Accounts Receivable 30 30 30 30 30
Cash from Inventory (200) (200) (200) (200) (200)
Cash from Accounts Payable 175 175 175 175 175
Subtotal 24,305 26,305 46,105 47,105 32,405

CASH FROM INVESTING

Capital Expenditure 4,000 4,000 4,000 4,000 4,000
Subtotal 4,000 4,000 4,000 4,000 4,000

CASH FROM FINANCING

Line of Credit Issue / (Repay) (7,000) – – – –
Term Loan Issue / (Repay) (3,000) (3,000) (3,000) (3,000) (3,000)
Equity Issue / (Buyback) (500) (500) (500) (500) (500)
Payment of Dividends (1,000) (1,000) (1,000) (1,000) 1,000
Subtotal (4,500) (4,500) (4,500) (4,500) (2,500)

CASH BALANCE
Beginning 5,000 5,000 5,000 5,000 5,000
Change in Cash 23,805 25,805 45,605 46,605 33,905
Ending 28,805 30,805 50,605 51,605 38,905
Balance Sheet

All figures in USD thousands unless stated 2022A 2023F 2024F 2025F 2026F 2027F

ASSETS
Cash 5,000 5,000 5,000 5,000 5,000 5,000
Accounts Receivable 6,000 5,970 5,940 5,910 5,880 5,850
Inventory 2,000 2,200 2,400 2,600 2,800 3,000
Property Plant & Equipment 65,000 57,000 49,000 41,000 33,000 25,000
Total Assets 78,000 70,170 62,340 54,510 46,680 38,850

LIABILITIES
Accounts Payable 3,000 3,175 3,350 3,525 3,700 3,700
Line of Credit 7,000 – – – – –
Term Loan 20,000 17,000 14,000 11,000 8,000 5,000
Deferred Taxes 1,000 3,000 5,000 25,000 27,000 27,000
Total Liabilities 31,000 20,000 19,000 36,000 35,000 32,000

EQUITY
Equity Capital 42,000 40,800 40,300 39,800 39,300 38,800
Retained Earnings 5,000 9,370 3,040 (21,290) (27,620) (31,950)
Shareholders' Equity 47,000 50,170 43,340 18,510 11,680 6,850

Total Liabilities & Equity 78,000 70,170 62,340 54,510 46,680 38,850

Check – – – – – –
Discounted Cash Flow Schedule

All figures in USD thousands unless stated Valuation Discrete Forecast Term
(YY-MM-DD) (YY-MM-DD) (YY-MM-DD) (YY-MM-DD) (YY-MM-DD) (YY-MM-DD) (YY-MM-DD)
23/01/01 23/12/31 24/12/31 25/12/31 26/12/31 27/12/31 28/12/31

UNLEVERED FREE CASH FLOW

EBITDA 1 20,500 22,300 23,900 24,700 29,800 30,396
Current Taxes (Unlevered) 2 (1,100) (1,100) (1,100) (1,100) (1,100) (1,100)
Capital Expenditure 2 (4,000) (4,000) (4,000) (4,000) (4,000) (4,000)
Cash from Working Capital 3 (25) (25) (25) (25) (25) –
Unlevered Free Cash Flow 15,375 17,175 18,775 19,575 24,675 25,296

ASSUMPTIONS CASH FLOW PROFILES

First Year of Forecast 2023 Discrete Forecast 15,375 17,175 18,775 19,575 24,675
Terminal Growth Rate 2.0% Terminal Value 4 – – – – 219,965
Weighted Avg. Cost of Capital 13.5% Total Cash Flow 15,375 17,175 18,775 19,575 244,640

ENTERPRISE VALUE EQUITY VALUE PER SHARE

PV of Discrete 64,615 23% Equity Value 263,580
PV of Terminal 219,965 77% Shares Outstanding (FD 000) 34,200
Enterprise Value 284,580 100% Equity Value (USD/sh) 7.71

EQUITY VALUE PREMIUM (DISCOUNT)

Enterprise Value 284,580 Equity Value (USD/sh) 7.71
Less: Net Debt (21,000) Current Price (USD/sh) 2.71
Equity Value 263,580 Premium (Discount) 184.4%

Terminal year EBITDA is equal to previous year grown at the terminal growth rate. ⁽¹ ⁾
Current taxes & capital expenditure in terminal year have been set equal to the previous year. ⁽² ⁾
Cash from working capital has been set to zero in the terminal year. ⁽³ ⁾
The growing perpetuity method was used to calculate the terminal value. ⁽⁴ ⁾