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Illustrative DCF Analysis For Happy Hour Co: Summary Financials and Cash Flow

This document provides an illustrative discounted cash flow analysis for Happy Hour Co. to estimate the company's implied firm value and net present value. It forecasts the company's financials like revenue, EBITDA, taxes, capex, and cash flows annually through 2030. It then calculates the unlevered free cash flows, applies discount rates, and sums the present value of cash flows and terminal value to estimate an implied firm NPV of $854 million based on a 9% WACC and 1% perpetual growth rate. Sensitivity tables show how the valuation varies with different WACC and growth rate assumptions.

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davin nathan
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6K views

Illustrative DCF Analysis For Happy Hour Co: Summary Financials and Cash Flow

This document provides an illustrative discounted cash flow analysis for Happy Hour Co. to estimate the company's implied firm value and net present value. It forecasts the company's financials like revenue, EBITDA, taxes, capex, and cash flows annually through 2030. It then calculates the unlevered free cash flows, applies discount rates, and sums the present value of cash flows and terminal value to estimate an implied firm NPV of $854 million based on a 9% WACC and 1% perpetual growth rate. Sensitivity tables show how the valuation varies with different WACC and growth rate assumptions.

Uploaded by

davin nathan
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Illustrative DCF analysis for Happy Hour Co

Summary financials and cash flow


Management estimates J.P. Morgan outside-in extrapolation
6 7 8 9 10 TV
DCF Forecast Year 0 1 2 3 4 5
Mar YE ($m)   2026E 2027E 2028E 2029E 2030E  
2020E 2021E 2022E 2023E 2024E 2025E
1.487 1.501 1.516 1.532 1.547
Revenue   1.149 1.256 1.354 1.147 1.443 1.472
1,0% 1,0% 1,0% 1,0% 1,0%
% growth 9,3% 7,8% (15,3%) 25,8% 2,0%
134 135 136 138 139
EBITDA   94 75 105 126 123 132
% margin 9,0% 9,0% 9,0% 9,0% 9,0%
8,2% 5,9% 7,8% 10,9% 8,5% 9,0%
% growth 1,0% 1,0% 1,0% 1,0% 1,0%
(20,7%) 40,8% 19,5% (2,3%) 8,0%
D&A (36) (40) (47) (52) (55) (48)
(48) (48) (48) (48) (48)

% of revenue 3,1% 3,2% 3,5% 4,5% 3,8% 3,2%


3,2% 3,2% 3,1% 3,1% 3,1%

% of capex 95,0% 95,0% 95,0% 95,0% 95,0%


79,2% 94,6% 103,8% 109,8% 95,0%
EBIT 58 34 58 74 68 85
86 88 89 90 92
% margin 5,8% 5,8% 5,9% 5,9% 5,9%
5,1% 2,7% 4,3% 6,4% 4,7% 5,8%
Tax on EBIT (4) (10) (15) (24) (18)
(12) (12) (12) (12) (12)
% tax rate 12,0% 17,7% 20,7% 35,0% 20,7%
13,9% 13,7% 13,5% 13,3% 13,1%
Capex (50) (50) (50) (50) (50)
(51) (50) (50) (50) (50)
% of revenue 4,1% 3,7% 4,4% 3,5% 3,4%
3,4% 3,3% 3,3% 3,3% 3,2%
Change in NWC 16 15 11 4 4
4 5 5 5 5
Other Cashflows (1) (1) (1) (1) (1)
0 (1) (1) (1) (1)
% of revenue 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%
Exceptional items (18) (7) 1 (5) 0 0 0 0 0 0

% of revenue 1,4% 0,5% (0,1%) 0,3% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Unlevered free cash flow   18 52 72 47 69 76 77 79 80 81 1.022

1 2 3 4 5 6 7 8 9 10
Cashflow Timing (Years to Discount)
0,61 0,56 0,52 0,48 0,44
Discount Factor 0,92 0,85 0,78 0,72 0,67
Discounted DCF cashflows   16 44 56 34 46 46 44 41 38 36 452

Net present value based on perpetuity growth method


Amount % of Sensitising firm value ($m) and implied offer price to WACC and TGR
Value Based on 09%
WACC & 01% TGR ($m) NPV
    Perpetuity Growth Rate (%)
Present Value of
402 47,1%   0,00% 0,25% 0,50% 0,75% 1,00%
Cashflows
PV of Terminal Value 452 52,9%
7,5% 939 / 429c 959 / 439c 980 / 450c 1002 / 461c 1026 / 473c
Implied Firm NPV   854 100,0%
WACC (%)

Net debt & 8,0% 873 / 396c 889 / 404c 907 / 413c 926 / 423c 946 / 433c
(85)
adjustments
Source:Implied
Companyequity value
Business  
Plan (January 770 research; J.P.
2020); Equity   Morgan analysis 8,5% 815 / 367c 829 / 374c 843 / 381c 859 / 389c 876 / 398c
W O R Implied
L D W I share
D E Bprice
REWING 1
387 9,0% 763 / 341c 775 / 347c 787 / 353c 801 / 360c 815 / 367c
($c)
% premium to
134,4% 9,5% 717 / 318c 727 / 323c 738 / 328c 749 / 334c 761 / 340c
current

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