Executive Summary
Built a standalone discounted cash flow valuation model using the annual report, including forecast assumptions, scenario testing, sensitivity analysis, and implied valuation interpretation.
Objective
To determine the intrinsic value of Unilever's equity using fundamental valuation techniques and assess whether the current market price reflects reasonable expectations for future cash flow generation.
Approach
- —Analysed historical financial performance and key value drivers
- —Developed explicit 5-year forecasts for revenue, margins, and capital requirements
- —Calculated weighted average cost of capital using CAPM and market data
- —Estimated terminal value using perpetuity growth and exit multiple approaches
- —Built sensitivity analysis around key assumptions
Key Outputs
- —Full DCF model with explicit forecasting period
- —WACC calculation and supporting assumptions
- —Terminal value analysis using multiple methodologies
- —Sensitivity tables
- —Value bridge from enterprise value to equity value
Commercial Insight
Consumer staples valuations are particularly sensitive to terminal growth and margin assumptions given the long-duration nature of cash flows. Small changes in perpetuity growth rates can materially impact value.
Tools & Methods
ExcelAnnual Report AnalysisCAPMDCF Modelling
Full materials available upon request.
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