Our DCF model is built on conservative expectations based on moderate sales and EBITDA growth of 1% apiece in the out-years and, for capex, our expectations are in line with the company’s guidance to which we apply a 2% out-year growth reaching €125m in 2034.
SOTP valuation
Our SOTP/NAV is replacement-cost-based on a geographical basis and product basis. We have used multiples of €170 per ton of cement capacity for grey cement in developed markets (Denmark and Belgium), a low multiple of €100 per ton of cement capacity for Turkey’s grey cement plants due to the difficult business environment in which the division is evolving.
Concerning white cement, we have used multiples of €100 for Malaysia, €120 for China, €150 for Egypt, as well as €250 for Denmark and the US.
Peers valuation
We have applied neither a premium nor a discount for most multiples, despite the stronger business model than the average cement company (premium) owing to the low free float (discount).
Note that Lafarge bought Orascom in 2007 at 11.6x EBITDA, HeidelbergCement bought Hanson in 2007 at 12.8x EBITDA, Holcim acquired Cemex’s Australian assets in 2009 for 6.6× 2009 EBITDA, Camargo swallowed Cimpor for 8.7x EV/EBITDA in 2012 and CRH bought LafargeHolcim’s assets for 8.7x EBITDA pre-synergies and 7.7x EBITDA post-synergies.
