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Drone Volt

CR
Bloomberg   ALDRV FP
Aerosp. & Defence Equipt.  /  France  Web Site   |   Investors Relation
Banking on services and European-made drones
Target
Upside 48.1%
Price (€) 0.61
Market Cap (€M) 23.5
Benchmarks Current multiplesWeightValues (€)Upside 
DCF (Edit and simulate)  35%1.45137%
NAV/SOTP per share   20%0.8946%
EV/Ebitda Peers 17.4 x 20%0.645%
P/E Peers -14.8 x 10%0.31-50%
Dividend Yield Peers 0.0% 10%0.00-100%
P/Book Peers 1.0 x 5%1.22100%
Target Price  100%0.9148% 
Valuation matters

DCF
To date, very few drone companies have managed to sustain the supposed growth rate of the market (+10%). We therefore apply a more conservative growth rate in our DCF going forward, namely 8% growth over 2027-34. The wider commercialisation of the LineDrone could push this estimate upwards. Thanks to cost containment measures, positive volume effects and a transition to services rather than products, we believe that long-term EBITDA growth of 8% is achievable.

NAV
For the NAV, in order to reflect the nominally strong growth potential and to compensate for the still early stage of the company, with high volatility in profitability, we have chosen to base our valuation on sales multiples. We value the company through its different segments, based on three-year average forecast sales, to which we apply a multiple. We value Distribution at 1x its estimated three-year average sales. This multiple is in line with similar distribution activities of European companies, taking into account the limited value-added and growth prospects. For Drone Volt Factory, we have fine-tuned our valuation as we split this into two different parts. First, we value the holding in Aerialtronics separately, but at half the sale price of this 50% stake to Aquiline. Secondly, we value the factory (corresponding to drone and camera sales, as well as services) and training based on the current trading multiples compiled on Bloomberg for the competitors, i.e. c.2x revenues. In addition, we value the emerging activity of Drone as a Service separately at 3x given the high growth and margins.

Peers
With regard to peers, finding a similar company to Drone Volt is quite a pitfall since there is currently no perfect match in our coverage, nor on the listed market. We, however, address this issue by valuing Drone Volt in line with the relevant players of the drone industry, such as Elbit Systems, Irobot and Aerovironment.

The target price has suffered from the different capital increases carried to support the high growth rates of the company as well as lower margins in its big distribution contracts.

Comparison Based Valuation
Computed on 18 month forecastsMcap (€M]P/E (x)Ev/Ebitda (x)P/Book (x)Yield(%)
Peers ratios 32.1 18.0 3.87 0.77
Drone Volt's ratios -14.8 17.4 0.98 0.00
Premium 0.00% 0.00% 0.00% 0.00%
Default comparison based valuation (€) 0.31 0.64 1.22 0.00
IsraelElbit Systems(Consensus) 15,065 29.317.93.860.78
United StatesAerovironment(Consensus) 3,355 41.826.6n/an/a
United StatesIrobot(Consensus) 104 -7.11-18.84.290.00
DCF Valuation Per Share Help View DCF history
WACC % 9.20
PV of cashflow FY1-FY11 €th 22,269
FY11CF €th 7,423
Normalised long-term growth"g" % 2.00
Sustainability "g" % 1.95
Terminal value €th 102,417
PV terminal value €th 42,484
PV terminal value in % of total... % 65.6
Total PV €th 64,752
Avg net debt (cash) at book v... €th 6,233
Provisions €th 336
Unrecognised actuarial losses... €th 0.00
Financial assets at market price €th 177
Minorities interests (fair value) €th 2,677
Equity value €th 55,683
Number of shares Th 38,355
Implied equity value per share 1.45
Sustainability impact on DCF % -0.53
Assessing The Cost Of Capital Help
Synthetic default risk free rate % 3.50
Target equity risk premium % 5.00
Tax advantage of debt financ... % 25.0
Average debt maturity Year 5
Sector asset beta x 1.09
Debt beta x 1.00
Market capitalisation €th 23,477
Net debt (cash) at book value €th 6,106
Net debt (cash) at market value €th 5,011
Company debt spread bp 500
Marginal Company cost of debt % 8.50
Company beta (leveraged) x 1.26
Company gearing at market v... % 26.0
Company market gearing % 20.6
Required return on geared eq... % 9.80
Cost of debt % 6.38
Cost of ungeared equity % 8.93
WACC % 9.20
DCF Calculation Help
  12/23A 12/24E 12/25E 12/26E Growth 12/27E
Sales €th   23,993 32,681 17,915 25,569 8.00% 27,615   
EBITDA €th   -2,245 -2,440 25.9 5,435 8.00% 5,870   
EBITDA Margin %   -9.36 -7.47 0.14 21.3 21.3   
Change in WCR €th   -1,792 -1,931 668 647 7.00% 692   
Total operating cash flows (pre tax) €th   -3,803 -4,271 794 6,181 6,561   
Corporate tax €th   -544 -615 -380 163 7.00% 174   
Net tax shield €th   -52.8 -50.3 -85.7 -90.0 7.00% -96.3   
Capital expenditure €th   -4,351 -3,916 -3,524 -3,172 3.00% -3,267   
Capex/Sales %   -18.1 -12.0 -19.7 -12.4 -11.8   
Pre financing costs FCF (for DCF purposes) €th   -8,751 -8,853 -3,196 3,082 3,372   
Various add backs (incl. R&D, etc.) for DCF... €th     
Free cash flow adjusted €th   -8,751 -8,853 -3,196 3,082 3,372   
Discounted free cash flows €th   -8,751 -8,853 -2,927 2,585 2,590   
Invested capital   13.0 15.5 15.4 15.4 15.9   
NAV/SOTP Calculation
 % ownedValuation technique Multiple used Valuation at 100%
(€th)
Stake
valuation
(€th)
In currency per share
(€)
% of gross assets
Distribution 100% EV/Sales 1 19,570 19,570 0.51 48.5%
Drone as a Service 100% EV/Sales 3 6,850 6,850 0.18 17.0%
Drone Volt Factory 100% EV/Sales 2 6,020 6,020 0.16 14.9%
Aerialtronics 50.0% NAV 7,500 3,750 0.10 9.30%
Other 4,154 0.11 10.3%
Total gross assets 40,344 1.05 100%
Net cash/(debt) by year end -6,106 -0.16 -15.1%
Commitments to pay
Commitments received
NAV/SOTP 34,237 0.89 84.9%
Number of shares net of treasury shares - year end (Th) 38,355
NAV/SOTP per share (€) 0.89
Current discount to NAV/SOTP (%) 31.4 View history

Changes to Story : 17/01/2025, Changes to Forecasts : 17/01/2025.